If you've decided to make the leap from renting a home to owning a home, you might be a little overwhelmed at the prospect of shopping for homes and applying for mortgage loans.

While mortgage loans can seem a bit confusing at first, you'll find that they aren't nearly as bad as they might seem once you've taken the time to learn more about the mortgage loan process.

While this is by no means to be considered a complete list of everything that might come up while shopping for a new home, you'll find below a brief guide to the process of shopping for a home and applying for a mortgage loan.

Searching for a home

The first part of buying a new home is, obviously, finding the home to buy. While there are obviously a large variety of homes available on the market today, it's important to make sure that you stay within the range of what you can afford. After all, you're going to be making payments on your house for years don't get in over your head before you even get started.

You should also begin figuring how much of a down payment you're going to be able to make, since the larger your down payment is the lower your monthly payments will be.

Realtors vs. direct sellers

You may wonder whether it's better to buy a house that's up for sale from a realtor or one that's being sold directly from the homeowner. There are several factors that can be brought into consideration when comparing the two, but the bottom line is that the realtor has the financing contacts to help you along and knows the real estate business much better than you do.

Discussing your options with realtors early on is also a great way to find out which properties are for sale as well as about how much the monthly payments on a mortgage will be for each.

Mortgages

When it comes time to take out a mortgage loan, you'll find a lot of options presented to you. The term of the mortgage can vary greatly, though most mortgages are for between 15 and 30 years.

You also might have to choose from a variety of payment options ranging from standard payments to balloon payments in which you begin with smaller payments and have a larger sum to pay at the end.

You should also take into consideration other expenses such as closing costs, insurance, and taxes before deciding how much you can afford to borrow.

A realtor or financial attorney can assist you in making these decisions as well as working you through the actual mortgage and purchase process.

Refinancing your mortgage

After you've been making payments for a few years and have paid off a significant portion of your mortgage, you might want to consider refinancing to make repayment of the remaining debt that much easier. Refinancing can allow you to use the equity that you've built up in your home to secure you a new loan, which is used to pay the outstanding balance on the original mortgage loan.

The refinancing loan will have a new loan term, a new (and hopefully lower) interest rate, and a much smaller amount to repay than the original mortgage meaning that you'll be able to enjoy a reduction in your monthly payments.

This can not only speed up paying off your house, but can also give you a little more money each month to do with as you please.

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