2 Important Things to Know Before Securing a Home Loan

mortgage loan agreement

mortgage loan agreementThe real estate market in Utah is on an uptrend. Home costs have surged over the last five years. From a median price of $190,000, it has now gone up to $280,000, far higher than the pre-recession prices of $250,000. That makes investing in a Utah property more inviting.

Getting a mortgage or refinancing an existing one is best dealt through home loans. Mortgages in Utah are not prohibitive at all, but before investing, it’s important to learn some facts about mortgage regulations and product types.

Regulations

It’s important that a borrower knows the laws and regulations that govern the industry to ensure investor protection. In Utah, the Division of Real Estate regulates the real estate, mortgage, and appraisal markets. They maintain a list of providers of mortgage loans, as well as brokers that are also depository institutions or affiliates.

There are 194 registered residential mortgage lenders and brokers in the state. You can check them on the Division of Real Estate’s website. The law that governs mortgages in the state is the Utah Mortgage Financing Regulation Act.

Mortgage types

If you’re abreast with the regulatory environment, you can now look into the type of mortgage loan to secure. Fixed-rate loans are the most common options. Their terms include thirty, twenty, fifteen, and ten years. Longer terms offer lower monthly payments. A disadvantage of this is that the annual percentage rate (APR) is higher than those of the shorter-term loans. An APR not only includes the interest rate but also broker fees and other charges.

The 30-year and 15-year fixed-rate mortgages are the most traditional of the mortgage types, but lenders also offer several adjustable rate mortgage (ARM) types. These mortgages’ interest rates float during the life of the mortgage. Often, they start at lower rates compared to fixed-rate mortgages.

Now armed with some regulatory and product type knowledge, you can start your mortgage lender hunt with ease.