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By John Hoots
Chicago has many nicknames; Windy City and Chi-Town are just two of them. Some even call it the most American of big cities or some other the City of Big Shoulders. However, none of the names reflects the fact that it is the third most populous city in whole of the United States of America and the fourth most important business centre of the world. In this perspective, it is hardly surprising that the city has a flourishing economy and a blooming real estate market as well.
Buying a home may be expensive, but if you look for one, it is not hard to find an experienced mortgage broker in Chicago, who will be able to show you how you can achieve your goal for much less. Now, who is actually a mortgage broker? Before we go into that, let us explain what mortgage is. Mortgage is simply a financial instrument by which a lender holds a property as security for a debt. It is important to remember that, mortgage itself is not a debt; it is collateral held by the lender and once the condition of the debt is fulfilled, it is returned to the borrower.
Therefore, when you buy a house on mortgage, you can use it in the way you want, but it will not belong to you completely because the lender will hold the title until you have paid up your debt. You can live in it, rent it out or use it in any other way, but you cannot sell it without the nod from the mortgage company. Now, what is a mortgage company? A company engaged in the business of originating and/or funding mortgages for residential as well as commercial property is called a mortgage company. Such a company will obviously originate the mortgage, but in many cases, they borrow funds from other lending authorities to provide the loan you are seeking.
A mortgage broker on the other hand is just an intermediary who brings the borrower and lender together. He collects the papers from borrower and passes it to the lender for underwriting and approval. The funds, once approved, are lent in the name of the mortgage lender and the broker just gets an origination fee for the services rendered. Therefore, do not confuse a mortgage broker with a mortgage company; the former is there just to facilitate the transaction for the later.
Finding a mortgage broker is not a hard task. However, you have to find out how good he is in his job. He may know many Chicago home loan companies, but is he adept in his job? Will he really be able to secure the loan under best possible term? To be sure, engage a reputed broker. He is reputed only because many property-buyers have found him proficient; otherwise, he would not be where he is now.
You can also work through reference. If somebody you trust have found somebody satisfactory, you can engage him as well. You can also ask him a simple question and see what his answer is! The question is – Why should anyone want to buy a home on mortgage? Is not a rented apartment far more convenient? Just pay the rent in time and all the headache lies with the property owner. See what he has to say for it.
However, if you are wondering why you should buy a house, the answer is simple. Purchasing a house on mortgage is actually a form of investment. If you live in a rented property, you will have to pay the rent on time. Here you are paying the mortgage instead. Besides, if you put them together, the amount of money you pay as rent is quite a lot. Add to that the tax benefit you miss and the cost involved in frequent change of residence. If on the other hand you buy a home even with home loan, you get.
A home that will be yours forever unless you choose otherwise
The installment you pay entitles you to tax benefit
You also make a tidy sum in equity
Now, the next question is what equity is. A good and proficient broker should be able to answer that too. For your information, equity is the interest or value an owner has in real estate over and above the liens against it. In other words, equity is the current market value of the property minus the outstanding mortgages. As the real estate value increases, there is also an increase in the equity. Keep on asking questions. A proficient broker will not mind. He will have all the answers ready.
About the Author: Article by John Hoots of ChicagoMortgageSpecialist.com, a website with the best
Chicago mortgage lender
information on the web.