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Old 03-08-2018, 04:20 AM
alexfisher50 alexfisher50 is offline
Junior Member
Join Date: Jan 2018
Posts: 11
Default Re: What is mortgage loan?

A mortgage is a secured loan where the collateral is usually a real estate property but can also be another form of security such as gold or insurance. Mortgages are most often used for acquiring more real estate property. These loans can also be used for a wide range of purposes and in fact most loans are technically mortgages.

There are several different types of mortgages but the most common are fixed rate mortgages which have the same interest rate for the duration of the loan and require equal payments each month. Adjustable rate mortgages offer lower immediate payments with a set interest rate for a set number of years. After the initial few years is up the interest will be re-calculated and can change 3-4 times during the mortgage. Most adjustable rate mortgages have a limited number of times the lender can actually change their rates.

A home loan is what you usually think about when you hear the term “mortgage”. These loans are given by the bank or another financial institution for the express purpose of buying property. The home or property purchased with the money doubles as collateral. In the event of default the bank has the right to liquidate the home.

Loans against property can be taken on property you’ve already paid the mortgage for. This can be any property you own, not just your residential property. The amount of a loan against property is typically decided based on the property’s value rather than the purpose the loan is for. These loans can also be used for any purpose including immediate financial needs rather than just for a home.

Buying property is a daunting task but knowing what types of loans are available can help you navigate the world of mortgages and find something that works for your financial situation.
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