Basic Information About Mortgage
What is Mortgage?
A mortgage is a type of debt that is used to loan a real estate property. The borrower is required and obliged to pay a specific amount for a given duration. The payment arrangement is set by the lender and then agreed by the borrower.
This is being used to purchase a property without having to pay the entire amount. On the other hand, the actual amount of the property will be divided depending on the arrangement set by the lender.
In the event of delays or failure to make payment, the bank has the right to demand either late fees or foreclosure. It is included in the agreement that the lender has the right to take over the ownership of the property if the borrower fails to pay as agreed. Furthermore, all the payments that were made before will not be refunded.
Types of Mortgage
Traditional Mortgage – This is highly recommended for borrowers to consider. The interest that the borrower needs to pay will not change from the first payment until the end of the mortgage. Even if the market interest rates increase, the payment that the borrower is required to pay won’t change. If the rates decrease, the borrower can opt to refinance which can give him the opportunity of paying lower rates.
Adjustable Rate Mortgage – The interest rate for this type of mortgage would be fixed for the initial term, then would change depending on the market interest rate. This is a riskier option as you may think you can afford to pay the amortisation but there’s a possibility the rates will increase. Therefore, you’ll have to pay more than what you initially thought.
After finding out what mortgage is all about, you’ll be able to analyse when you need to apply for one. When you need one, you better get help from an established company. Thus, contact Julie Rashleigh and they’ll surely update you throughout the process and won’t leave you hanging.