A mortgage is essentially a loan, usually given by a bank, to provide individuals and families with funding to secure housing. Mortgages fall into the larger category of financial loans, but are specifically designed for real estate. Mortgages contain several different components, which include collateral, principal, taxes and insurance.Know More
Mortgages vary in amount and have different payment options. Most mortgages operate on 15 to 30 year time periods, and allow borrowers to make repayments typically on a monthly basis. The amount of time allotted for repayment varies depending on the size of the mortgage and the lender, and typically requires repayment of the original amount of money loaned and an additional interest fee.
Mortgages are typically established during contracts when homeowners purchase new homes. As with the new home, buyers sign a legal contract upon securing a mortgage, which acknowledges that they understand to the terms of the loan and will make repayments as indicated. This legal promise, which includes repayment of the loan and all additional fees, uses the new home as a collateral for the loan. Upon signing a contract, owners agree to repay the original loan amount, called the principal, and interest, which is calculated in a percentage, and is called the interest rate. Most lenders penalize for late payments using a system of points, and may even foreclose on a home.Learn More
According to Broker Outpost, a person can get a mortgage loan with a 520 credit score. Mortgage brokers work face-to-face with the poor credit holder and the lender to sort through credit issues so the credit holder can receive a mortgage loan.Full Answer >
According to Chron, the major advantages of a bank loan are stability and autonomy if the borrower is a small business. This source explains that banks lend money without taking ownership in the enterprise for which the loan is being used, so the borrower retains total autonomy as long as the money is paid back in time.Full Answer >
Getting a loan without a bank account is not impossible, but the lack of a savings or checking account rules out loans from most traditional lending institutions like credit unions and banks. HowStuffWorks explains that lenders view a consumer's lack of a bank account as a liability since those who do not have bank accounts are often unable to obtain one due to financial hardship or a bad banking history.Full Answer >
A borrower can obtain a bank loan when he meets the bank’s lending criteria. This is determined during an application process where the borrower provides information related to his credit history, credit score, current employment and potential assets that could secure the loan.Full Answer >