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Building Community Blog

Buying a home is an exciting experience, especially if it's your first time. If you've never taken out a home loan, it's perfectly normal to be unfamiliar with your mortgage options. Don't let mortgage confusion discourage you from that homebuying excitement!  

It's easy to get lost in all of the information out there, but we're here to help. We'll explain what a mortgage is, how it works, what types of mortgages you're likely to see, and the advantages and disadvantages of those types.

What is a Mortgage?

A mortgage is a loan that a bank or a mortgage lender gives you to help pay for a house. You'll be responsible to pay back the loan over the course of several years or decades.

If you're currently paying a mortgage payment, you are likely paying escrow.

Escrow is an account separate from the mortgage account where payments are made to fulfill conditions of your mortgage. These conditions are usually things like property taxes and insurance. Although your escrow is kept in a separate account, it is still generally collected as part of your monthly mortgage payment (or, can be paid as a lump sum). Your escrow payment can fluctuate from year-to-year and it's important to pay attention to the numbersit can save you money in the long run!

Getting pre-approved for a home mortgage might be the most important thing you can do when looking for a new home. Pre-approval tells you how much you can afford to buy and tells the seller you can be trusted to pay for a house.

This is especially important when competing with other buyers for the same house. If you have a pre-approval from a mortgage lender, a seller will be much more likely to sell to you.

You may be familiar with Twin Cities Habitat for Humanity's Homeownership Program. The program is designed to help first-time homebuyers achieve their dream of owning a home through an orientation, application process, and financial coaching. But did you know that TCHFH Lending, Inc. provides its own mortgage product to help homebuyers finance the purchase of their home, too?

Here’s how the home loan works:

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