What is a mortgage? Here's your definitive guide to home loans, how they work and how they help you buy a place.
Collateral is something that backs — or secures — a loan. It makes the loan less risky, because the borrower has skin in the game. With mortgages, the collateral is usually the home that the borrower wishes to buy. If you can’t repay the mortgage, the lender will foreclose on the...
A collateralized mortgage obligation (CMO) refers to a type of mortgage-backed security that contains a pool of mortgages bundled together and sold as an investment. Organized by maturity and level of risk, CMOs receive cash flows as borrowers repay the mortgages that act as collateral on these ...
because the property is the underlying asset that serves as security (collateral) for the money lent. An appraisal is an independent assessment of a property’s value, which isdone by an expert for a fee.
A mortgage is a loan used to purchase or maintain real estate including houses and commercial properties. Mortgages help buyers afford real estate they couldn't buy in cash.
over a thousand years. The term refers to any financial instrument where a borrower purchases land or real estate and uses that land or real estate as collateral to secure the debt. While consumers associate the term with their debt, the party holding mortgage is the lender, not the borrower...
A mortgage is simply the financing of a home. Like an auto loan, a mortgage allows the consumer to legally own the underlying asset (car, home). Like auto loan paperwork, mortgage paperwork allows the lender to take back or “repossess” the underlying asset (aka “collateral”) if the ...
Definition:A mortgage is loan where the lender is protected from default by the borrower’s collateral identified in the mortgage agreement. In other words, it’s a loan where the lender has the right to force a sale of the collateral and collect the proceeds if the borrower is unable to ...
A mortgage is the most common tool people use to buy a house without the cash upfront. Why are lenders willing to shell out so much money to homebuyers? A mortgage will commit the house you buy as collateral. It means your home will be the lender’s security for the repayment of the...
A second mortgage is a home-secured loan taken out while the original, or first, mortgage is still being repaid. Like the first, the second mortgage uses your property as collateral. A home equity loan and a home equity line of credit (HELOC) are two common types of second mortgages. ...