1stMortgage (First Mortgage)
If you are buying a home, the
mortgage you will need to be looking into is a 1st mortgage and you will probably want to know
exactly what this is and how you use it during the home buying process.
Typically when someone goes to buy a house, they
do not already have all that cash on hand, so they have to get a loan, or in other words, a mortgage. A first
mortgage is the mortgage from the first lien holder who lends you the money and if you have to require a
mortgage refinance, this would be your 2nd mortgage. Having a 1st mortgage will protect the lender so that
if someone is forced into bankruptcy, the lender will be paid first before any other debt that person had.
Also, with this mortgage, if the home is foreclosed, they will be the one who will own the home and be able
to sell it.
The interest rate on a first mortgage is
typically pretty low and this is because of such a low risk margin, and if you ever have to look for mortgage
refinancing, you will probably get a better rate getting the second mortgage on the first one with that same
lender. If you decide to get a 2nd mortgage with someone different, you should be sure to pay off the
1st mortgage first
because your home cannot be in default if you are paying them, even if you are not making your other payments,
and then you will more than likely be able to stay in your house.
Depending on your situation, you might have to
get a bad credit mortgage for your 1st mortgage, and shopping around for someone who will do this for you is a good idea.
Another good idea is to try to make your credit better before you are out shopping around. It is always better
to have good credit in the first place, but because everyone’s situations are different, there are some places
out there who will work with you.
Making sure you get the best deal on your first
mortgage might save you years down the road, and if you do have more than one mortgage, you should always
remember to pay your 1st mortgage first. Mortgages do not have to be scary, but you do need to be smart when
getting your first mortgage and making it work for you.