Home loans in US have become quite a popular option for home financing or purchasing a home with the help of external funds. A large number of home loan companies are participating in the home loan market of the United States making the market more and more competitive.
In the U.S., a home loan basically refers to a mortgage loan. A mortgage loan is usually required for buying a house. In case of a home mortgage loan, the house that an individual is going to buy is utilized as security or pledge. Until and unless the home loan is paid in full, the title of ownership is not transferred to the borrower from the lender. If the mortgage loan borrower makes a default in the repayment of the loan, the lender has the discretion to sell the house and use the sales proceeds for clearing the home loan.
The amount of home loan, which is going to be offered to the mortgage borrower, frequently depends on the credit ratings and credit history of the person concerned. The majority of lenders do not intend to lend to people with bad credit history because they consider it to be risky. However, a number of subprime lenders or bad credit mortgage lenders in the country are ready to provide home loans to this kind of persons.
The fundamental constituents of home loans in US are the following:
Mortgage
Property
Borrower
Lender
Principal
Interest
Repossession or foreclosure
In the United States, home loan is also known as residential mortgage simply due to the reason that this kind of loans is availed for residential purposes only. This is a long-term loan and the factors, which regulate the home loans, are the following:
Interest rate (fixed or variable)
The term of home loan
The frequency of payment and the amount of payment
Prepayments
The different types of home loans available in the U.S. can be broadly categorized into the following types:
Fixed rate mortgage (FRM)
Adjustable rate mortgage (ARM)
The various methods used for repayment of home loans in the U.S. are the following:
Interest Only Repayment
No Capital or Interest Repayment
Interest and Partial Capital Repayment
Foreclosure and Non-Recourse Lending
Capital & Interest Repayment
The leading home mortgage lenders in the United States include the following:
Wells Fargo
GMAC home loans
Fannie Mae
Ginnie Mae
Freddie Mac
Citifinancial
Bank of America
Ameriquest Mortgage
Hong Kong and Shanghai Banking Corporation (HSBC)
First American Mortgage
