Home Mortgages
What is a mortgage?
A mortgage is the advance of a loan to a person or business for the purpose of acquiring an asset. This asset is usually real estate and usually a home, but a home mortgage could be given for a yacht or a barge or for land. For most people the term mortgage and home loan are interchangeable. Home mortgages are usually paid back over decades, so they are usually subject to variable interest rates. There are also commercial mortgages available, but that is not within the scope of this article.
In most countries, a home mortgage is the accepted way for individuals to buy property. Unaided payment by individuals for property is a rarity. Some people find the language of the mortgage a bit off-putting at first but it is not as bad as it first seems.
The Creditor
The creditor is the institution lending the money to the borrower, usually banks, insurance companies, building societies or credit unions. Other terms for creditor which are in common use, are lender and mortgagee. The creditor has legal rights in connection with the loan and the property. These rights are protected by the mortgage.
The Debtor
The debtor is the borrower i.e. the individual or group which is getting the mortgage. The debtor is also known as a mortgagor or obligor.
There are usually terms and conditions attached to the home mortgage, or indeed any mortgage. If the debtor fails to comply with these conditions the creditor may cancel the mortgage and repossess the property. This is in fact a rare occurrence. Â Lending institutions do not want the bad publicity associated with this course of action and it is only done as a last resort.
Mortgage Broker
In some cases a mortgage broker is involved in the securing the home mortgage. A mortgage broker is essentially a sales man. The mortgage broker will receive an application for a home mortgage and advise the borrower on the best terms available for their particular circumstances from the various financial institutions in his portfolio. He is paid by a fee, usually commission based on the amount of the loan, by the institutions from which the borrowers get their mortgage.
Online Services
Only a few short years ago, someone getting a home mortgage had very few options when it came to researching their loan. Many home mortgage companies have now begun to join the internet revolution. One of the best methods of researching your home mortgage and comparing terms and rates, is the internet. This means that you can sit in the comfort of your own home, or internet cafe, and surf for a better home mortgage taking as long as you want. Compare this to sitting in the bank manager’s office nodding your head as if you understood what he was saying to you and then signing where and when he told you.
There is now an even wider variety of mortgages available than there used to be. There are many reasons for this, which we will not go into now. However, it is likely that the main reason is marketing.
Some web sites will give you with credit score information, property values and information about how to ask for home mortgage advice. Home mortgage acquisition is not the traumatic ordeal that it used to be. There is more than just mortgage advice available on some of the sites. In fact you can get advice on almost anything on the internet these days. However, you should always bear in mind that it is the internet. You do not have to be qualified to write an article. The advice that you get on a website should be confirmed by a qualified professional afterwards. The information you get may be inaccurate and even misleading. There are people out there whose business it is to take advantage of the innocent.