What is a mortgage?
Most home buyers have to borrow money in order to purchase their home. Few have enough money sitting in the bank, or in other easily saleable assets, to pay the entire cost of the home at once. (Even those few who do have enough money usually find it financially advantageous perhaps for extra tax relief — to borrow some of the money.) The home loan they receive is called a “mortgage.” Generally, a mortgage is a loan of money to the home owner secured by a “lien” on the real estate.
Let’s assume the day has arrived that you’d like to buy a house. Chances are you don’t have enough cash in the bank to pay for it in full. Instead, like a car, you would probably prefer to put a small amount down, and make monthly payments on the rest. This is the purpose of a mortgage loan. A mortgage loan is procured by a buyer to pay off the seller of a piece of property in full. The buyer then owes the mortgage lender the total amount borrowed, plus interest and fees. As collateral or guarantee of payment, the lender of the mortgage holds the deed or ownership of said property, until the buyer pays the mortgage off. However, the buyer occupies the property as if it were already his or her own. There are several types of mortgage loans available, and which is best for a particular buyer depends on his or her financial situation and long term plans. Some people plan to stay in a house for thirty years; others make short-term investments to move up the real-estate ladder. Matching the
A mortgage is a loan secured by real estate. In other words, in return for the funds you need to buy a home or pay off an earlier mortgage, a lender gets your promise to pay back the funds over a certain period at a certain cost. Backing your promise to repay is the property, which the lender has the right to take should you default.
What this means in layman terms is that a bank allows you to assume the ownership of a piece of property so long as you repay the cost of that property under a set of rates and terms as defined by the bank. A mortgage can be referred to in a variety of different ways. Some call the mortgage a “lien”, which is the amount of money a borrower owes on a property. Whatever is left over from the original loan amount is called the existing lien(s). Others might refer to the mortgage as a trust deed, or deed of trust, which is just the legal document that outlines the terms of the agreement. A bank, otherwise known as a lender will loan you a specific amount of money that will need to be repaid in “X” amount of years at “X” interest rate. Assuming you qualify, the bank will grant you a loan and you will go into contract with that bank and begin making regular monthly payments until your mortgage is paid in full. There are three main types of mortgage transactions: Purchase Rate and Term Refina
A mortgage is a loan that you borrow from a financial institution such as a building society in order to buy a property. The key point about a ‘mortgage’, as opposed to a personal loan for a car or holiday, is that it is secured against the property purchased. This means you could lose your home if you don’t keep up the mortgage payments and why mortgage advertisements carry the warning: YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. However, the whole purpose of share2buy is to increase affordability by joint purchase, NOT by over-stretching your individual repayments.
