A mortgage by definition can be identified as a long-term loan on a piece of real estate. In some cases, the loan may be used to re-finance other real estate projects. Payment of this type of loan is often made over a an extended period of 15 – 30 years. Mortgage rates depend on a number of factors such as the value of the property.
For people wishing to own a home or invest in real estates, there are many avenues you can use to get a mortgage. Some of the options you may opt for include online brokers, mortgage companies, credit unions and other financial institutions such as banks. The loan has two parties involved; the bank/ broker as the lender and you, the borrower. Similar to other loans, the principal is the amount you are given for your projects. Interest is calculated using this amount.
There are two main types of mortgages based on the interest rate; floating/ adjustable rate & fixed. In the later case, interest rates remain at a constant whereas in the second case (adjustable-rate mortgage), the interest rate of the loan is fixed for some time after which it changes. You can safely conclude that part of the borrower’s risk is transferred to you, the borrower. If you have no idea as to which to go for, don’t worry. Visit a mortgage broker for advice, or you can try mortgage calculator on the website.
There are restrictions on commercial properties that has been mortgaged – there are limited options of reselling it until you have fully settled the mortgage. For more details on the terms and conditions of a home loan make an appointment with a mortgage broker. He/she will explain to you in details what a foreclosure is. A foreclosure refers to a provision by which the lender may seize your property in case of a default in payment or a breach of contract.