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Quick Homeowner Loans and How They can Help You

Today, a secured homeowner loan is one of the most popular loan types offered by the lending industry. This loan uses the borrower's home as collateral and can be slightly different depending on whether it is used for refinance or purchase. Here's a how both of them work:

Refinance Loans

If you want to get a homeowner loan in order to refinance an outgoing mortgage there are a couple of things you need to know about. First of all, there is no seller here, as you already own the property. A refinance loan usually have a three day "cooling off" period, during which you can pull back out of the entire transaction. Once the three day period has passed, the lending company will fund the loan by sending the funds to the title company, which then distributes them accordingly.

Purchase Loans

Purchase loans can be a little more complicated then is the case with refinance loans, especially due to the fact that you are not the owner of the property yet. Like with the refinance loan, a purchase loan also starts with an application process. In it, you give the loan officer some necessary information about you, such as your name, birth date, where you live, income, employment information, asset information and any details on the property you are purchasing. Once he receives all of this, the loan officer will take a look at your credit report and have you sign the disclosure statement. This includes: terms of the loan, monthly payments and interest rates. After this, the loan officer will order the property and title work to be appraised by an independent and professional appraiser. He will calculate the fair market value of the property. Also, it is important to make sure that there are no problems in the chain of ownership and that the current owner has every legal right to sell it. Once everything has been cleared and paid, you can assume the ownership of your new home.