Many among us would cringe every time we hear the word “mortgage” for there were thousands of people out there who lost their houses and real properties because of foreclosures. Because circumstances had been bitter to many among us, the sound of the word “mortgage” seems to carry a memory that is very traumatic. Yet, there are also many people who were able to have their own homes through the help of mortgage loans.
It is a reality that the prices of real estates are quite high, and hence, many people could not afford to buy one. Without availing of mortgage loans, this bunch of people will be forever unable to buy and own a home. Mortgage has become their means of financing their real estate purchase, and in the end, they were successful in paying out their mortgage. Their mortgage investment property or rather properties surely benefited them most. Likewise, this bunch of people were fortunate not to experience foreclosures of their properties, and for this reason, they are thankful of the availability of mortgage loans.
It is also true that perceptions regarding the idea of mortgage vary from one person to another. Some people perceive mortgage somewhat negatively as nothing but an instrument of lenders to milk people of their money. Others see mortgage positively as the only means by which they can get a good home for their families. These people believe that with their present salaries, they will never be able to buy a house considering the exorbitant prices of real estates, nowadays. Hence, mortgage is their only way to finance their purchase of real estates. Some others, however, even fear the very idea and sound of the word “mortgage” because their failures to pay their monthly amortizations in the past had led to the foreclosures of their properties. This varied perceptions regarding mortgage is understandable considering the fact that the experiences of various people regarding mortgage are varied and diverse.
Mortgage, as said earlier, refers to the loan or financing that a buyer of real estate can avail of. It is sometimes called mortgage loan and is utilized by purchasers of real estate to finance their buying of a real property. However, nothing is free in this world, and for this reason, mortgage comes with a price, that is, with interest rates. Mortgage is usually secured on the property of the borrowers. In case, therefore, that the borrower reneges in the payment of his monthly amortization, he may experience the prospect of foreclosure, in which the property is taken away from him by the institution that loaned the money to him. Borrowers may be an individual or a business that is mortgaging a commercial property. The lender usually is an institution such a credit union, a bank, or a building society.
Lenders would surely not give out something without getting something in return. In case of the mortgage, the money, that lenders lend, are very much secured on the property of the borrowers. The borrower agrees legally to pledge his interest in his property as collateral for the loan that he is availing of. Likewise, lenders rake in their profits by imposing interest rates on the said loan. Hence, lenders are always in a win/win situation every time they provide mortgage loans to borrowers.