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Mortgage loans

A mortgage loan will most likely be the largest debt you will ever incur. Simply put, a mortgage is a loan to finance the purchase of your home. This is based upon a note that you sign where you pledge your home as collateral (or guarantee that in the case of non-payment of the loan the home can be used to repay the debt).

Most mortgage loans these days are amortized over a period of time. Amortization is the term that refers to a fixed payment over a period of time, which enables the borrower to reduce the debt gradually through monthly payments of principal and interest. A fixed rate mortgage, for example, has a set monthly payment while the amount of interest paid slowly is reduced to $0 by the end of the loan (even though at the beginning the borrower is generally pay a large portion of interest).

There is so much to learn for finding a mortgage loan that fits. If there is one aspect of the home buying transaction you take the time to learn in detail, make it mortgages. There are two basic choices when you are ready to shop for a loan and these are direct lenders and mortgage brokers. Direct lenders have money to lend. They make the final decision on your application. Lenders have a limited number of in-house loans available. Brokers are intermediaries who, like you, have many lenders from which to choose. If you have special financing needs and can't find a loan to suit them, an experienced broker may be able to search out the financing you need. Mortgage brokers, however, are paid with a slice of the amount you borrow, some more than others.