For many people, owning a home is part of the American Dream. For most homeowners in the US, getting a mortgage is just one step to that end.
Before we get into the subject, let's talk about the basics of a mortgage. First of all, what does the word "mortgage" actually mean?
A mortgage loan, also known as a home loan, is an agreement between you (the borrower) and the mortgage lender to purchase or refinance a home with money provided by the lender.
This agreement gives the lender the legal right to repossess the property if you default on your mortgage, in most cases without paying back the money and interest you borrowed.
A mortgage is a contract between you and the lender that gives the lender the right to take your property if you do not pay back the money and interest.
Most people who buy a house use a mortgage. If you can't pay the full cost of your home out of your own pocket, you'll need a mortgage.
In some cases, it makes sense to take out a mortgage on your home even if you have money to pay it off. For example, investors sometimes mortgage real estate to finance other investments and to take advantage of tax credits.
The term 'loan' can be used to describe any financial transaction in which one party agrees to receive a lump sum and return that money.
A mortgage is a type of loan used to finance real estate.
A mortgage is a “secured” loan. With a secured loan, the borrower promises the lender a security if they stop making payments. In the case of a mortgage, the mortgage is the house. If you stop paying your mortgage, the lender can take possession of your home in a process known as foreclosure.
.svg_20230202161558723_42.png){kind=icon}
