What Is Mortgage and Second Mortgage
What Is Mortgage and Second Mortgage
The word mortgage literally translated from old French, means ‘dead pledge’. Today it is universally understood to mean a loan secured against property. A Mortgage (also called a home loan) is a legal contract made between a lender and a borrower that uses property as collateral to secure the loan. The lender can take possession of the property if the borrower fails to pay the prearranged home loan payments.
A mortgage lender is a financial institution that provides prospective homeowners with the funds over a long-term period to pay off their home loan mortgage. Borrowers are required to pay monthly installments to their lender which includes principle, interest, and additional lender fees. Examples, mortgage bankers and mortgage brokers.
A mortgage broker is the middleman who helps match borrowers with lenders based on corresponding needs and standards. Mortgage brokers arrange more the 80% of all transactions between borrowers and lenders, yet mortgage bankers actually finance and distribute the largest portion of home loans compared to all other lenders.
A second mortgage is a type of mortgage refinancing that allows you to acquire a second loan on your home in addition to your first home loan.
Mortgage refinance occurs when borrower uses the money from a refinanced loan to pay off an existing home loan. Borrowers typically do this to extend their home loan period, apply for a lower interest rate, or to use some money out of their equity.
If you breach the terms and conditions of a mortgage contract, for example, by not repaying to lender, the lender is entitled under the deed of mortgage to make an application to the courts. This may result in the re-possession and sale of the property in order to pay off the debt, however, this course of action is normally only taken as a last resort.
Is A Mortgage Broker My Best Choice?
Category: Mortgage broker
