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Basic Mortgage Loan Information
from:Many professionals take the information that they have at their fingertips for granted. Consumers may require some basic information about a mortgage loan before making any rash decisions. Simply providing a clear definition and outlining the participants can help potential homebuyers make the most of their experience.
What is a mortgage loan? This question is not often asked by consumers. However, some homebuyers may not have a full understanding of this type of debt. Professionals in the field often forget that the consumers are not as well informed as they should be.
Mortgage Loan Basics
A mortgage is a type of loan that uses property to secure the debt. This property does not have to be a home in the fundamental meaning of a mortgage. Traditionally, the term was used to refer to various items bought with credit including ships and jewelry. The term basically referred to using collateral to assure that the debt would be paid in a timely manner.
The word comes from the French, meaning “dead pledge.” This somber definition conveys the seriousness of the promise and it also has some legal undertones as well. A mortgage loan is a legal contract that uses the property in question as collateral.
Today, the mortgage loan is strongly tied to residential and commercial real estate property. In a nutshell, consumers can reside in a home or conduct business in a building without paying for the real estate up front. The mortgage loan is used to provide instant access with the requirement of timely payments.
The Participants
Of course, a mortgage loan is not a solitary venture. There are various participants in the process. One of the most important contributors is the creditor. The creditor, or lender, maintains legal rights to the money owed for the property.
Basically, the creditor owns the mortgage and has right to the property if the debt is not paid as agreed. Banks and other lending institutions are typical lenders that make funds available for consumers so they can purchase property. These organizations are also known as the mortgagee, lender or beneficiary.
In contrast, the debtor is the individual borrowing the funds to pay for the property. This individual is required to make installment payments in order to pay off the mortgage loan within a specified period of time. After the debt is paid in full, the debtor becomes the owner.
Failure to hold up to the obligation may result in foreclosure. The creditor owns the mortgage until it is paid in full. The homebuyer may revoke his right to the property if he fails to keep his end of the bargain. The debtor is also expected to pay interest on the loan, making the venture profitable for lender.
A mortgage agreement is a complex exchange that is legally binding. Legal representation is often necessary in the process as well. Other participants can include mortgage brokers and financial advisors. Each individual has an important role in the proper development of a mortgage loan.
Residential Mortgage News
Will Commercial Real Estate be Next? - Huffington Post
Will Commercial Real Estate be Next? Huffington Post, NY - During the last decade the world clamored for residential mortgage securities because everyone was quite convinced that US housing prices never fall, ... Commercial mortgage delinquencies on the rise |
SE Financial Corp. Announces Fourth Quarter and 2008 Year End ... - MarketWatch
SE Financial Corp. Announces Fourth Quarter and 2008 Year End ... MarketWatch - The pipeline contains a mix of residential mortgage loans, commercial real estate loans, residential construction loans, home equity loans and lines, ... |
Goldman Faces Loss of $2 Billion for Quarter - Wall Street Journal
Goldman Faces Loss of $2 Billion for Quarter Wall Street Journal - In late November, Standard & Poor's downgraded scores of residential mortgage-backed securities, most of them backed by subprime mortgages and a somewhat ... |
Hong Kong Residential Sales Plunge 79%, Biggest Drop Since 1996 - Bloomberg
 The Standard | Hong Kong Residential Sales Plunge 79%, Biggest Drop Since 1996 Bloomberg - HSBC Holdings Plc and Bank of China Ltd., the city’s two biggest home lenders, have also raised mortgage rates to maintain profitability, adding to pressure ... HSBC drives up cost of getting mortgage China Property Slump Threatens Global Economy as Growth Slows |
Mortgage advances slip further - The Witness
Mortgage advances slip further The Witness, South Africa - John Loos, property strategist at FNB home loans division, says this indicates that residential mortgage advances are largely responsible for the declining ... Reports indicate further tough times ahead for SA property market |