Home Mortgages

A mortgage is like a loan that is taken by using a property as a security. Conventionally, a mortgage loan is taken to buy the same property that is also used as collateral. Mortgages are generally taken on real estate properties rather than other movable properties. Home mortgages are loans that are taken to buy a house, which is also the security for the loan.

Taking a home mortgage enables a person to defer paying for the home purchased. Ideally, there are two parties in a home mortgage: the creditor (who gives the loan) and the debtor (who takes the mortgage). Other parties can be a legal advisor, a mortgage broker and a financial advisor. Like conventional loans, mortgages can be repaid in various ways: capital and interest, Interest-only, no capital or interest (reverse /lifetime/equity release mortgages), interest and partial capital, etc. Other kinds of mortgages are second mortgages, refinance mortgages, and bad credit mortgage loans.

Another most important aspect in home mortgages is the mortgage rate, which is the rate of interest that is to be paid, along with the capital. Based on the rate, home mortgages can also be categorized as fixed-rate mortgages and adjustable-rate mortgages. The kind of mortgage to be taken depends on the borrower’s requirements and situation. The main aspects to be considered are: how much can be borrowed? What is the price range? And what are the tax advantages of taking the mortgage?

The home mortgage process, also known as origination, involves several stages: submission of an application and documentation about credit history and income, checking of the documents and credentials by the underwriter, and granting of the mortgage. A good credit history is very important for securing a home mortgage. Creditors charge some fees for giving a mortgage: entry and exit fees, administration fees and lender’s mortgage insurance.

Getting a home mortgage is no longer a tedious process. Most lenders have online websites that enable borrowers to discuss the mortgage, submit an application and also compare the various options. Their sites also have easy-to-use home mortgage calculators that give all information, including payments to be made each month and the tax advantages, with the single click of a button. Most of them also have financial advisors who would provide advice online, or over the phone. The internet is a good source for locating a good mortgage dealer. However, make sure that their credentials are good enough.