Mortgage Loan – An Option for Buying a New Home

If at this point in your life, you are considering buying a house, but you don't know what this implies, this article might be exactly what you were looking for.

Here, ClearPath Lending mortgage experts are going to tell you the important points you need to know about mortgages and how people use them as an option to buying a home.

Bellow, you will find out which institutions offer these types of products, the requirements to apply for them, the types of mortgages that exist and the elements that make them up.

The best thing is that you will discover everything about mortgages, so that you can evaluate if this is the best option for you.

What is a mortgage?

In its most exact definition, the word mortgage refers to a right that encumbers real estate to guarantee the fulfillment of an obligation or the payment of a debt. This definition also refers to the amount of money that constitutes that debt.

Because of their operation, mortgages are used to buy a new home or to borrow money on the value of a home you already have.

Mortgages are generally applied on real estate such as a house or land, but it is also possible to generate a mortgage on personal property such as vehicles or works of art. For example, a person can make a mortgage contract on their house without having to leave it to deliver it to the creditor. However, the mortgage guarantee should always be taken into account before signing any document.

What is a mortgage guarantee?

It is the right granted over a property to an institution with which a debt is contracted, since in case the debt is not paid, whoever gave the loan money can become the owner of the property to sell it and recover the money.

Basic elements of a mortgage contract

Here, mortgage specialists working for the lending company, ClearPath Lending, are going to tell you the basic elements of a mortgage and explain how they work:

· Capital, which is the total amount of resources lent to the debtor. Generally, the capital borrowed is less than the value of the property left as collateral in the mortgage.

· Then we have the interest rate, which implies a charge of a fixed or variable percentage on the debt.

· The term indicates the time in which you are expected to return the money they loaned you.

· The debtor is the person who receives the mortgage money.

· The creditor is a banking or credit institution is the one that lends the money to the debtor.

Important points to check in a mortgage

· The amount of the loan.

· The interest rate and associated points.

· Additional costs that include insurance, expenses, etc.

· The type of interest rate that can be fixed or variable.

· The term of the loan, or the time you have to pay it off.

· If the loan has other risk points, such as prepayment penalties, final global payment clause, among others.

Search among all the options that exist to find a mortgage that you can pay after taking into account all your priorities. You’re not alone in this journey toward financial confidence—nor should you be. To help people move onward and upward toward financial confidence, ClearPath Lending (see their profile on Facebook) has helped thousands of people find the right tools, resources and motivation on their journey toward a life well spent.