subject: Mortgage Made Easy For All [print this page] Mortgage is like renting a property from a financial institution and owning it after you have paid your rent faithfully for a certain period of years. It happens when a prospective owner pledges his interest in a certain property as collateral for a loan. In basic terms, it is the financing obtained from a financial institution directly or through an intermediary to build or buy a property.
Typically, there are many features of such loans, and they differ depending on laws and jurisdictions, they include:
The size of the loan
The maturity of the loan
The interest rate on the loan
The instrument/method of pay back, etc
Mortgage loans have made home ownership for a lot of families possible. Although it was designed to give financing options to those with limited liquid funds to be able to buy property, it is almost becoming unusual for even the privileged to buy properties outright. The borrowed amount plus the interest rate - which is commensurate with the risk of lending, is conventionally supposed to be paid back periodically within 10 to 30 years or as mutually agreed time by the lender and borrower. Depending on the agreement and repayment period, the interest rates can be fixed, high or low.
What sets it apart from other types of loans is the right of the lender to foreclose, repossess or confiscate the property if the agreed terms are breached over a period of time. The borrower is of course also given the option of re-financing the loan increasing or decreasing the repayment frequency and/or amount.
Since the value of property rarely depreciates over time, it is fairly easier to secure mortgage loans than other types of loans. The lending bodies dont have much to lose as they can confiscate the property any time you default. As long as you can prove that you have the capacity to repay the loan over a certain period of time, and have a certain percentage as down payment, the chances of getting is quite certain.
by: Chris Cornell
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