The below topics are discussed in much more depth
A mortgage is the type of security instrument most often used in connection with loans for the purchase or improvement of real estate. The document is usually recorded in the public record and becomes a lien on the property.
A mortgage requires a contract between two parties, so the conditions contained in the mortgage must be agreed to and sealed by both parties in order for the contract to be valid. Those conditions are likely to include mortgage assignments; assumptions; the lender's ability to declare the mortgage due on any sale of the property, and assignment of rents in the event of default on the note.
Interest rates, terms, fees and closing costs vary widely between lenders so it is always wise to shop for the one that will give you the best deal. The difference between the highest and lowest rate you are quoted could affect your cash flow by substantial amounts.
Investors Pay More
Rental property mortgages have historically been higher risk loans, so mortgage insurance underwriters limit the number of non-owner occupied mortgages they will insure for individual borrowers to five. Additionally, real estate investors do not have the interest rates, terms or down payment options that are advertised and available to home buyers.
Types of Mortgage
A fixed rate mortgage is one in which the interest remains the same for the term of the loan.
Escrow or Impound Accounts
Property taxes become a lien on real estate when past due and therefore affect the security given for a mortgage loan. Causality and flood insurance are also important to a lender because their security could be damaged or destroyed. Consequently, many lenders require that a portion of the cost of property taxes and insurance be collected with each mortgage payment and placed in special account to pay the bills as they become due. The taxes and insurance portion may, therefore, affect the amount of a fixed term payment as property values rise and insurance rates fluctuate.
The above topics are discussed in much more depth