So, you’re thinking about getting a property, and you’ve probably heard the terms “home loan” and “mortgage” thrown around. But are they the same thing? Let’s break it down in simple terms!
Understanding Mortgage Loans
Let’s start with a mortgage loan. This type of loan can be used for any purpose by the borrower. The key point hereis that the lender takes ownership of the borrower’s property until the loan is fully repaid.
Understanding Home Loans
On the other hand, a home loan is specifically used to buy or build a new home. It can also be used for purchasing land or for home renovations. Think of it as a secured loan, where the house itself acts as collateral until the borrower pays off the full amount.
Not All Loans Are Created Equal
Why is a home loan generally cheaper to finance than a mortgage loan when it comes to cost? Because the interest rates and processing fees on a home loan are usually lower than those on a credit card.
Documents You’ll Need
To apply for either a home loan or a mortgage loan, you’ll typically need documents like proof of identity, address, income, bank statements, real estate-related papers, and tax returns. Remember, these are the basics, and additional documents may be required depending on the lender.
The Bottom Line
A mortgage loan is more about using your property as collateral, while a home loan is specifically designed for purchasing or renovating a home. Mortgages often come with lower interest rates due to the lower risk they pose to lenders compared to other types of loans.
In conclusion, finding the right mortgage lenders St Louis can make all the difference in your home-buying journey. Our location is the perfect place to get started on your path to homeownership, see our location today.
