Mortgage lending is the process of issuing mortgage loans. A mortgage loan is received by securing a real property. Usually, a mortgage loan is taken out to buy a house or some real estate. In mortgages, the real estate itself functions as collateral to the loan.
A mortgage is a process in which a property (real or personal) is used as security for the repayment of a loan. A mortgage loan can be taken for buying a commercial or personal real estate property. In a home mortgage loan, the house that is to be bought is kept as security or pledge.
If there is a default on behalf of the borrower, the bank holds the claim on that house. The regular repayment of the mortgage loan amount brings down the principal and this process is known as amortization of the mortgage loan.
Home mortgage or residential mortgage is the main device for financing private ownership of residential properties in many countries. The amount of a mortgage loan is often dependent on the concerned person’s credit ratings or history.
The parties involved in a mortgage transaction can be categorized into two types:
The borrowers of mortgage loans are also known as originators
The lending institution Factors regulating mortgage lending include:
interest rates, which may be fixed for the whole life of the loan or variable where the interest rate can go up or go down
term of the mortgage loan
payment amount and frequency
Normally there are two types of amortized loans.
Fixed Rate Mortgage (FRM) and
Adjustable Rate Mortgage (ARM) or floating rate or variable rate mortgage.
The mortgage quote is the total benefits and costs associated with a mortgage. There are various ways of receiving a mortgage quote which may include the services of a mortgage broker or communicating directly with a mortgage lender.
There are various ways of repaying the mortgage loan.
Capital & Interest Repayment
Interest Only Repayment
No Capital or Interest Repayment
Interest and Partial Capital Repayment
Foreclosure and Non-Recourse Lending
The different types of mortgage loan include the following:
Buy down mortgage
Foreign national mortgage
Graduated payment mortgage loan
Hard money loan
Term loan or interest-only loan
Negative amortization loan
The mortgage lending institutions include the following:
American Financial Mortgage
Global One Lending
For further details, please refer to the following links:
- Mortgage Preapproval
- Mortgage Processing
- Mortgage Underwriting
- New Mortgage Loans
- Mortgage Marketing
- Mortgage Lender Types
- Reverse Mortgage Lender
- Second Mortgage Lender
- Private Mortgage Lender
- Commercial Mortgage Lender
- Mortgage Approval
Last Updated on : 24th August 2013