If you’re looking to buy a home in El Paso, you may also consider applying for a mortgage loan. However, it is important to know how mortgage loans work, as well as important terms. Rocky Mountain Mortgage Company has everything you need, from information on our loan programs to applying for a loan with one of our loan officers.
Mortgages in a Nutshell
A mortgage is the most common type of real estate loan. Much like all other types of loans, a mortgage loan is when a borrower receives a certain amount of money from a lender for a set time and is repaid with interest. The difference between a mortgage loan and other types is that the lender can foreclose your property if you fail to make the payments on time or in full. Thankfully, Rocky Mountain Mortgage has a homeowners assistance program for El Paso residents struggling to afford their mortgage loans.
Terms to Know
We understand that applying for a mortgage loan can be nerve-wracking, especially if you’ve never done so before. Before you speak to one of our EL Paso loan officers, try familiarizing yourself with these terms:
- Payment Frequency- This is the amount of payments you make on your loan each year. The amount of payments you make each year will impact the size of your loan.
- Points- If you need to lower the interest rate on your loan, you will have to pay fees (or mortgage points). Not every mortgage will charge these points, so be sure to check your loan.
- Interest Rates- An interest rate is the cost you pay to borrow the loan. Mortgage interest rates are usually around 3%-8% depending on the borrower’s credit score.
- Amortization- In most situations, mortgage loans are fully amortized, which means your loan will be fully paid off by the end of the term. If it is NOT fully amortized, it means the amortization payments will extend past the end of the term.
- Term- The term of the loan is how long you have to pay it off. The most common timeframe of a mortgage loan is between 15-30 years.
- Loan Amount- This is the amount of money the borrower receives from the lender. Depending on what kind of loan you apply for, the loan will be around 75%-95% of the price of the property.
Before applying for a loan with Rocky Mountain Mortgage CO., we recommend taking a look at our mortgage loan calculator and mortgage payment calculator. The mortgage loan calculator will help you determine how much you can afford in a home down to the estimated closing costs. This calculator only shows an approximate amount, so if you need an exact loan amount, please reach out to one of our expert loan officers. The mortgage payment calculator will help you determine how much of a monthly payment you can afford. To calculate the payment, you will need to know your monthly debt, maximum debt, and gross income.