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Mortgages
Mortgage
is a system in which the asset is used as security for borrowing
money.Mortgage is the most common financing method undertaken in the
real estate transaction.Generally mortgage is paid as monthly
installments which couples a certain percentage of the principal with
the interest for a specific term period say 30 years.A large variety
of mortgage products are available in the market.
A
mortgage will generally involve two participants
The
mortgagee is the sponsor for the loan.He is the person who lends the
money.
The
mortgagor is the person who borrows the money.
There
are a large number of mortgage lenders namely
Banks
Mortgage companies
Mortgage brokers
Mortgage lenders
Credit unions
Insurers
Financial
institutions
Home
mortgage is the most prominent kind of mortgage.The factors that are
considered when applying for a home mortgage are
Term period
Interest rate
Closing
transaction fee
Discounts
The
interest rate of a mortgage can be a fixed interest rate as well as
an adjustable interest rate.If the individual opts for a fixed
interest rate then his monthly payments will remain the same
throughout his term period.If the option is adjustable interest rate
the monthly payment varies depending on the current market value.The
term period may be 30 years or 360 months.In some cases even 10 or 15
years is also available. |
