Mortgages are debt instruments used to finance large secured loans using amortization. For traditional mortgages amortization simply means that the loan has a fixed interest rate, and you pay it over a specific period, usually 30 years.
It is a French term that means “death pledge.” Early lenders used it to reinforce the idea that either you kill the debt by repaying the loan with interest, or the debt kills your right to the land if you fail to pay.
In order to get a loan for your house, you must go through underwriting. This process ensures that you can afford the house. It also ensures that the property’s value is in line with the sale price.
There are also reverse mortgages. With these loans, the bank pays you a specific amount that is borrowed against the value of your home. you can only get these loans if you have significant equity.
Foreclosure is the process where the bank takes possession of your property if you fail to make payments. If you fall behind on your mortgage it is important to seek help quickly. There are many places you can go for assistance if you are not too far behind on your payments.