Mortgage

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Mortgage is a debt instrument secured by taking a particular real estate as collateral. The borrower is compelled to repay with a preset schedule of payments. Mortgages are utilized by businesses and individuals to finance large real estate purchases without paying directly the entire quantum of purchase value. It is also known as 'claims on property' or 'liens against property'.

In other words, the mortgagor or borrower commits to the mortgagee or lender a legal claim on the property. The property is regarded as collateral for that particular loan. [1]

Contents

[edit] Mortgage servicing

It is described as administering a mortgage. Mortgage servicing includes calculation of principal and interest. The service also includes tasks like acting as an escrow agent, collection of payments from the mortgagor, and even conduct a foreclosure in case of default. [2]

[edit] First mortgage

It is the mortgage that has first claim on the mortgaged property in case of a money default. [3]

[edit] Graduated payment mortgage

It is a variation of fixed rate mortgage. The payment in graduated payment mortgage increments from at first a low base level to the final, desired level. The payments usually increase by 7-12% per year from the first payment. Graduated payment mortgage is taken until total payment is given. This type of mortgage loan is particularly suitable for young homeowners. [4]

[edit] Mortgage Refinancing

Mortgage Refinancing happens when you pay off an existing mortgage or secured loan using a new mortgage. Mortgage refinance makes sense when interest rates move lower.[5]

As a result of the Financial Crisis, mortgage rates in the US and many western countries have reached historic lows in 2009. As a result, borrowers on fixed mortgage rates may be able to significantly reduce their mortgages by carrying out a 'mortgage refi'.

[edit] House Poor

It is a type of financial situation where an individual spends a substantial proportion of his or her income on matters relating to the home. These include taxes on property, maintenance, and mortgage payments. Utility payments are also considered in this case. The outflow of cash in this manner forces the individual to struggle to meet other financial commitments. [6]

[edit] Hypothecation

It describes a right of the banker to liquidate goods if the person who has pledged mortgage as collateral defaults on the payment of his or her loan. The economic term also applies to securities kept in a margin account that was utilized as collateral for money loaned from a broking house. [7]

[edit] International Mortgage Insurance Links

[edit] US State and City Mortgage Links

[edit] International Mortgage Insurance

[edit] See also

[edit] References

  1. ↑ Investorwords.com [1]
  2. ↑ Investorwords.com [2]
  3. ↑ Investorwords.com [3]
  4. ↑ Investopedia.com [4]
  5. ↑ EconomyWatch.com [5]
  6. ↑ Investopedia.com [6]
  7. ↑ Investopedia.com [7]

[edit] External links

[edit] Further reading

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