Buying a home is one of the biggest purchases a person or a family makes and it is also a difficult process. Not everyone has enough money on their accounts to buy a house, and this is when real estate mortgages come into play.
A mortgage is a loan made in exchange to the title of the borrower’s property. If not paid on time, the lender has the right to foreclose on the property and sell it to cover the loan. Mortgage lending is the primary source to finance private ownership of residential property. There are different types of mortgages, so let’s try to define each type of them.
A fixed rate mortgage is one that includes an interest rate that remains the same for the entire life of the loan. Fixed rate mortgages are the most popular and their biggest advantage is that the homeowner is able to budget their expenses. The opposite of this is an adjustable rate mortgage that includes fluctuating interest rate that varies over the life of the loan and it is adjusted according to a set formula.
A reverse mortgage allows homeowners of 62 years or older borrow money against the value of their homes. The repayment of the mortgage is done when the borrower dies or sells the home. The loan amount will not exceed the value of the house over the life of the loan.
Before making a mortgage loan make sure you contact an experienced real estate lawyer who will provide you with all necessary information and will help you to choose the right mortgage type for you. Visit Legal Bistro if you need legal help!