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The purchase of a home is often the biggest purchase that people will make in their lifetime and while there are those few who may have the cash on hand to purchase a home almost everyone else will need to obtain a loan. A loan for a home is called a mortgage loan and it is secured by a mortgage or a security interest on the real estate.

A mortgage is a security interest on real property; therefore a mortgage loan is secured by the house you are purchasing. The mortgage note certifies the presence of the underlying loan combined with encumbrance on the real estate. The mortgage note and the deed to the property will both be recorded at the country recorders office in the county where you live.

Mortgage loans are very diversified and they can vary significantly in factors such as the amount of down payment that is required, the maturity of the loan, the method of payoff and the interest rate. There are three categories for mortgage loans. FHA and VA loans are backed by the government and conventional loans are backed by the private sector. The down payment needed by the buyer is generally lower on the government-backed loans.

Recently, with the economic downturn and the subprime mortgage crisis, mortgage money has become much harder to obtain. 2 or 3 years ago, it was much easier to get a mortgage than it is now. But there are still homes being sold across this nation everyday and with the prices going down now it may be a good time to purchase a house.

Prior to going out looking for a home you should pre-qualify for your mortgage. It may be very disheartening to locate a great house you want to buy only to find out that you cannot get a mortgage for it. A well-prepared homebuyer will always have a pre-approved mortgage in place before they start looking for a home.

In order to qualify for a mortgage loan you will need steady income, good credit and depending upon the kind of loan you get additionally, you will likely need a down payment that will range from 3% to 20% of the loan amount. It's not just you, the buyer, that will have to qualify for the mortgage but the house must also qualify and it must appraise for the purchase price or higher in order to get the loan.

The mortgage approval process will take into consideration your income, your credit history and your current debts. To obtain a ballpark estimate of how much you can qualify for you should use this general guideline. Your total house payment including taxes and insurance should not surpass 29% of your gross monthly income and your house payment and all your debts like credit cards and car payments should be at 41% or less of your gross monthly income.

For those who have any glitches on your credit you have to address them prior to applying for your new mortgage loan. For those who have outstanding debts you will need to eliminate them and you will have to repay anything that could put a lien on your new home, such as judgments, taxes or any mechanics bills. Before you make your first appointment with the mortgage lender you need to get your credit report and begin repairing and improving what you can.

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