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Monday, December 24, 2012

Mortgage, Home Mortgage Loans

By definition, a Mortgage is not a loan in itself, but an agreement for the repayment of the borrowed amount along with interest, fees and applicable taxes within a specified period. The term is widely used in the real estate industry where the property being purchased is pledged as a collateral or security, usually by creating a lien against it. The loan, thus taken, is fundamentally a mortgage loan, but the word "mortgage" is often used to mean the same. In US and many other countries, the mortgage loan taken to buy a home is often referred to as a Home Mortgage, which is very much similar to a Home Loan, although some differences might exist between the two in some geographical locations across the globe.


A mortgage is simply a legal document that binds a mortgagor (borrower) and mortgagee (lender) to the amortization schedule. It protects the interests of the lenders, banks or lending agencies by allowing them to sell the property concerned and recover their dues if the borrower, who is also the home owner, fails to fulfill the mortgage obligation. The sale process, thus initiated, is referred to as Foreclosure, which can be judicial or non judicial, depending upon the inclusion of the power of sale clause in the Deed of Trust, a preferred security instrument in many US States.


Fixed Rate Mortgage (FRM) and Adjustable Rate Mortgage (ARM) are the two most common types of amortized loans. Other kinds include Balloon Loans, Jumbo Mortgages, Blanket Loans, Reverse Mortgage, Equity Loans and Bridge Loans, to name just a few here. Wells Fargo, Bank of America, Citi Financial and Chase Bank are some of the most popular mortgage companies in the US whereas Fannie Mae, Freddie Mac and Ginnie Mae (that operates within the constitutional framework of HUD) create a second layer in the lending market by purchasing mortgages from the primary lenders and selling mortgage-backed securities (MBS) to investors. Apart from the conventional loans, there exists federal-government support as well, mainly in the form of FHA and VA Loans, in the US mortgage finance industry.


The process of securing a mortgage loan starts with the origination, which involves the submission of a loan application, credit history report and other documents by the borrower to the underwriter. To speed up the process, automated underwriting system, such as Freddie Mac's Loan Prospector and Fannie Mae's Desktop Underwriter, is being used these days. Check the Annual Percentage Rate (APR), closing fees and other charges before choosing a mortgage loan program. Moreover, Private Mortgage Insurance (PMI) is not required if you can put down at least 20 percent of the home buying price and the interest rates will also be lower in this case.


Our website realestatezing.com endeavors to include in its scope all that comprise the real estate industry in US and countries like Australia, UK, Canada and India. Buying a property often requires some sorts of financial assistance, which is provided by mortgage and home loan industry. It is for this reason we have created a separate section on "Mortgage" which aims at providing updated information, latest news and lots of valuable resources, such as Mortgage Calculator and amortization schedule tables along with updates on current mortgage rates. We invite you to explore our site with the expectation that the resources provided here will help you seek a better mortgage deal.

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