Mortgage

Mortgage



Mortgage
A mortgage is​ a​ practice by which the​ ownership of​ the​ property is​ passed from the​ mortgagor,​ to​ the​ mortgagee,​ in​ return for the​ loan of​ the​ money,​ the​ mortgagee is​ the​ lender and the​ mortgagor is​ the​ borrower .​
The mortgagee has limited rights on​ the​ property until the​ loan is​ paid off .​
Most probably the​ mortgage loan is​ taken for home improvements,​ or​ financing college education .​
The interest rate for mortgage loan varies depending on​ the​ type of​ the​ loan
Mortgage banks and Mortgage brokers are the​ best options for reviewing of​ mortgage loan applications.
For Mortgage banks,​ the​ staff of​ the​ bank will process the​ loan application,​ as​ most of​ the​ banks are controlled by the​ government agencies,​ the​ borrower can be assured that the​ mortgage loan will be approved and granted by reliable sources and there will be no discontinuation in​ the​ loan .​
The bank will provide a​ range of​ mortgage service providers for a​ particular loan application,​ and the​ borrower should select the​ best available option from them .​
The borrower should deal with the​ service providers,​ compare each of​ the​ interest rates and select the​ best option .​
The loan application will be processed much faster by bank staff.
Mortgage brokers will present the​ best available option for a​ particular loan; the​ brokers will provide the​ best option for a​ loan application that meets the​ borrowers' needs .​
If the​ loan product is​ selected,​ then the​ borrower should deal directly with the​ service provider to​ finish the​ formalities .​
Most of​ the​ information on​ loan products of​ mortgage service providers will be available with the​ mortgage brokers.
The borrower before using the​ services of​ the​ brokers should verify whether the​ mortgage broker is​ registered with any reliable company or​ service.
Mortgage loan types
There are many types of​ mortgage loans available in​ the​ mortgage industry,​ but the​ two most common types of​ loans are Fixed Rate Mortgage (FRM) and Adjustable Rate Mortgage (ARM).
For fixed rate mortgage,​ the​ interest rates are fixed and are high,​ the​ rates will not change during the​ life of​ the​ loan,​ the​ repayment time ranges from 10 to​ 20 years.
For adjustable rate mortgage,​ the​ interest rate fluctuates with respect to​ a​ standard market index,​ it​ will increase or​ decrease with respect to​ the​ index,​ the​ borrower cannot predict the​ interest rate for the​ next interest period before hand,​ if​ the​ interest rate increases,​ the​ borrower has to​ pay the​ extra cost,​ to​ avoid this,​ some lenders offer interest lock,​ using this,​ the​ borrower will repay the​ debt on​ a​ fixed interest rate for a​ particular period,​ the​ lender will charge extra money for this service .​
The repayment time ranges from 5-10 years.
The borrowers who borrow fixed rate mortgage loans are more financially secure than who borrows adjustable rate mortgage loans .​
The proceeds from adjustable rate mortgage negates any risk and most of​ the​ borrowers' uses this loan as​ repayment mode.
Presently the​ mortgage markets in​ Asia are growing mush fast than the​ developed countries .​
In Asia,​ India has the​ second highest interest rate of​ 7%.In UK,​ interest rate for a​ 15-year fixed rate mortgage loan (FRM) is​ 12% and for 30-year adjustable rate mortgage is​ 15%.For a​ 1-year adjustable rate mortgage loan (ARM) is​ 4.05%.




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