The Price of a Mortgage
March 30, 2010

Mortgage Basics

In fact, the biggest investment that the typical person makes in the course of their life is in a house. …

Mortgage Basics: What Is a Mortgage?

You may have reached the vital point in your life when you are ready to invest in a home. In fact, the biggest investment that the typical person makes in the course of their life is in a house. A mortgage loan, or mortgage, is used either by buyers of real estate to purchase a home or by existing owners to raise money for any purpose while pledging a lien on the property. The loan is secured on the property of the borrower through a process known as mortgage lending. This means that a legal mechanism will be introduced in place that allows the lender to take possession and sale of the secured property (“foreclosure” or “repossession”)  if the borrower stops making payments,  defaults on the loan or otherwise fails according to its terms.

Mortgage debtors may be individuals who charge their home, or they may be companies that pledge commercial real estate (for example, their business premises, residential property rented to tenants, or an investment portfolio). In most cases, the lender is a financial institution, such as a bank, a credit union or a building society, depending on the country, and the credit arrangements can be made either directly or indirectly through financial intermediaries. Characteristics of mortgage loans like the size of the loan, the term of the loan, interest rate, method of disbursement of the loan and other features can vary considerably. The rights of the lender to the secured property take precedence over the other creditors of the borrower, i.e. if the borrower goes bankrupt or becomes insolvent, the other creditors will only repay the debt from a sale of the secured property when the mortgage lender is repaid first in full,

When you start buying a home, you probably have many questions – even some fundamental ones. For example, you might be wondering exactly what a mortgage is. While you may have heard the term “mortgage” throughout your life, you may not understand what a mortgage is all about.

This article is meant to provide you an introduction of what a mortgage is to give you a foundation on which to start your search for that perfect home and to start your search for the most appropriate financing for your home.

Home Mortgage Defined

The most common type of mortgage today is the home mortgage. Of course, there are other types of mortgage loans, depending on the type of property that is being purchased. The home mortgage is focused in this article for two reasons. As mentioned earlier, buying a home is usually the most significant investment a person will make during their lifetime. Secondly, all other mortgages work primarily according to the same principles of a home mortgage loan.

A mortgage loan is a loan model where a home buyer borrows money to buy their home. In return for the funds made available to the borrower to buy the house, the borrower executes a mortgage for the benefit of the lending institution. The mortgage itself is an agreement by which a lien is given to the property. The lien remains on the property until the lender releases it after the loan itself has been settled and fully paid.

Mortgage Expert Guide, if you are searching for a home loan or just have a question about mortgage, you've come to the right place. Mortgage Expert Guide | Everything You Wanted To Know About Mortgages