mortagesandforeclosures

by Mikel Dormier

Mortgages or a mortgage loans is a particular type of debt, which is constituted when the borrower pledges landed property or real estate as a security against the loan amount.

Having collateral such as a landed property against the amount of loan that has been borrowed lowers the risk for the creditors as there exists an assurance that the money could be had back by disposing the collateral through auctions and such. The loan amount is usually much less than the value of the property which also lowers the risk to the creditor considerably.

At other times the services of a surveyor or such licensed professional is obtained in order to appraise the property and determine its value. If there is no such valuation process in place then an estimate is taken based on current market values and the worth of adjoining properties etc.

Mortgages are usually procured for purchasing landed property or real estate by pledging the property with the creditor until such time that the loan amount is repaid. The eligibility of an individual to procure these loans depends on their credit rating and other monetary parameters. These scores are carefully evaluated by the lending authority before sanctioning these mortgages.

These loans are usually provided to those individuals who have a healthy credit history and are sure to repay. Almost all banks have access to credit scores from a central database and use it to determine the eligibility of a person for this kind of loan.

These loans are also required to be repaid over a long period of time, usually twenty or thirty years and early repayments are discouraged by prospective money lenders and may result in a punishment.

There are plenty of things to consider in your mortgage loan. Having a bad credit score is just one of them and could cause you to pay a much higher percentage rate on your loan.

Finding your home is stressful enough, make sure you also get the right mortgage. There are a number of great options, ARMs, 30 year fixed loans that you can take out to pay for your new home.

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