Monday, November 8, 2010

Mortgage Loans


A mortgage loan is a type of loan that is secured by real property via a mortgage note.  This mortgage note documents the existence of the loan and the encumbrance of the property through the granting of the mortgage that secures the loan.

In the United States, since the prices of homes and properties are very high, it is typical for a prospective buyer to secure a mortgage in order to purchase the property.  These mortgages can be secure from a bank or a mortgage broker.  (In a future post, I will talk more about the differences between obtaining mortgage loans from these two).


When obtaining a mortgage, you can either get a fixed rate or variable rate.  You can also get interest free for a specific time period and/or have a balloon payment clause.  In the last decade, lenders created many different loan programs to get prospective buyers to bite on low initial rates (without necessarily being able to afford the real interest and principal payments), and this caused many defaults and foreclosures.

When applying for a mortgage, your assets and credit profile will qualify you for a specific rate.  It is up to you to decide if your rate and payment fit within your income and lifestyle.

68 comments:

  1. "In the last decade, lenders created many different loan programs to get prospective buyers to bite on low initial rates (without necessarily being able to afford the real interest and principal payments), and this caused many defaults and foreclosures."

    Tell me about it! This will probably live on as a haunting cause of the recession.

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  2. jeez i hope to have as low of a mortgage as possible when i buy my first house!

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  3. People who couldn't afford these loans really came back to bite everyone in this economy.

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  4. Great information and advice in this post, thanks a lot for it. We are actually looking at a second house to purchase and flip right now, so this is very relevant to my needs!!

    I will definitely be checking back in with your blog!

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  5. This is very enlightening. Thank you.

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  6. o man i remember learning about this in high school...can't remember anything about it though

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  7. interesting..I am waiting for a new post..:)

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  8. Yeah some good info here. Thanks dude

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  9. It's a lot harder to apply for mortgage loans nowadays than it was a few years ago. Please disable the capitcha on your comments, it's very annoying. =D

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  10. Although I don't have to worry about this right now, I'm sure I'll be thanking you for this insight a few years down the road.

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  11. i'm trying to save money, but i'm not good at it :/

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  12. Can't wait to buy my own house. Mortgages are scary though.

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  13. It's good to dig deep before you take a loan.. Some of em are nasty stuff!

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  14. Sometimes I think I should go in for a mortgage. Then I snap out of it.

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  15. hmm i hope i never need this information

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  16. The more you know the better!.

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  17. mortgage is none of my concern right now! thankfully haha. thanks for the information!

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  18. I'm learning a lot, can't wait to read more!

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  19. luckly i live in brazil...i guess...

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  20. Mortgages are important to pay off :D

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  21. Interesting stuff. I'm not sure it applys to me at the moment though

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  22. Wow what a great blog! I'm sure this is info I can use one day! I'm following you and I hope you'll follow me too!

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  23. Someday I can hopefully get a really nice house without having to get too big a mortgage. I cant wait for the update, I wanna see what the difference is between the 2.

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  24. Thanks for the information. Maybe helpful to many

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  25. This is pretty good to know since I'm about to purchase my first house.

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  26. i thought everyone got a house for free?

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  27. don't do it, the bank owns your ass forever

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  28. its all about starting to save when you are young, and not get piled behind credit cards.

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  29. Interesting, thanks for the info!

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  30. loans will screw you over for the rest of your life

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  31. loans and credits are bad mkey.

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  32. I don't have these problems, but it sure seems like a legit point you're making here...

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  33. yeah man, mortgages have gotten a lot more difficult in the US now due to the recent crisis. so thanks to all the clowns that came before, a lot of us can't get loans, or are paying more when we do. awesome!

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