It is always advisable for the borrowers to understand the basics of mortgage loan before they decide to take one. The basics of mortgage loan are made up of several topics that are related to the mortgages and are crucial for the borrowers.
Nature of Mortgage Loans
The mortgage loans normally have longer term periods. The payments of the mortgage loans are normally periodic and are almost like the annuities. The payments are normally computed as per the formula of time value of money.
Term Period of Mortgage Loans
The term periods of mortgage loans are different for different mortgage loans. However, most of the mortgage loans have term periods that range from a period of ten years to a maximum of thirty years.
Payment of Mortgage Loans
The mortgage loans are repaid in different ways. However, most of the mortgage loans are repaid in monthly installments. The borrower pays back the loan amount along with the rate of interest that is decided at the time when the mortgage loan is provided by the lender to the borrower.
Lenders of Mortgage Loan
The primary motive behind a lender giving out mortgage loans is to make some income from the interest that is paid along with the loan amount at the time of repayment. At times the lender trades the mortgage to another lender.
The interest rates that are charged by the lenders depend upon the levels of risk that the lenders think they are taking by providing a mortgage loan to a borrower. If the levels of risk are perceived to be high then the rates of interest may go up as well.
Normally the lender is entitled to the property that has been pledged as a collateral in the mortgage loan as long as the loan is being repaid. If the borrower is not able to pay back the mortgage loan the lender has the right to take away that property and use it as per his convenience.
Online Mortgage Loans
The online mortgage loans are the newest inventions in the world of mortgage loans. Now with mortgage loans available on the Internet it has become easier to avail them.
Last Updated on : 1st July 2013