What Is a Mortgage?
A mortgage is a loan secured by the collateral of real estate. Mortgages typically have 15 to 30-year terms and can have a fixed or adjustable interest rate. The borrower is bound to make monthly payments to the principal, which is your outstanding balance. In the case that you stop making payments, the lender can take possession of the property. Otherwise known as the process of foreclosure.
All in all, the lender holds the most stake in your home. Therefore, by making monthly payments, you’re always increasing the amount of ownership in the property. Lastly, here’s a fun fact for you: The origin of the word “mortgage” is Latin and then came from Old French, which initially meant a death pledge.Continue reading