Author: Gurpreet Sekhon
Mortgage is a loan for purchasing real estate, in which the real estate itself acts as the biggest guarantor of the loan.
Mortgage means using property for the payment of debt. The two main participants in a mortgage are creditors (also known as lender or mortgagee) and debtors (mortgager or borrower). There is also need of legal participants: solicitor, lawyer and conveyancer.
The creditor provides loan to the debtor for the purchase of property. Normally the creditors are financial and banking institutions, insurers those who provide loans for the purchase of property. The debtor fulfills all the conditions of the creditor and normally it includes business owners, homeowners and landlords those who are purchasing property through loan.
There are two types of legal mortgages: mortgage by demise and mortgage by legal charge. In mortgage by demise, the mortgaged property is owned by the creditor until full redemption of the loan. In mortgage by legal charge, the property is owned by the debtor but the creditor has right to take possession of the property or sell it. Such type of mortgages are fully registered, which give security to the creditor.
You will find many different types of mortgage loans but here we will explain the two main types of amortized loans: fixed rate mortgage and adjustable rate mortgage. In fixed rate mortgage, you have to pay fix rate of interest until its full repayment. The changes are only made in the monthly payments with ups and downs in property taxes. In adjustable rate mortgage, the interest rate is fixed only for some period. The rate of interest is changed monthly or annually on the basis of market conditions.
Other types of mortgage loans include: bridge loan, reverse mortgage, term loan, repayment mortgage, seasoned mortgage etc. There are numerous mortgage loan providers. Before applying, you will decide that which type of mortgage is best for you. You can take help from financial adviser or mortgage broker. You should make comparison of different companies and their fee structures, interest rates and many other things. The best mortgage companies or lenders charge proper interest and don't try to tie you in.
About the author: Author presents a website on mortgage http://www.mortgagelinksnow.info/ . This website provides information about meaning of mortgage, participants of mortgage, types of legal mortgages, mortgage loans and selecting best mortgage provider. You can visit his site http://www.findbestmortgagedeals.com/
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