Mortgage Loans 101 :

An Introduction to Mortgage Loans
What is a mortgage loan?

A mortgage loan is simply a legal agreement of between the buyer of a property and a money lender. The lender agrees to provide some type of financing for the buyer. In this agreement, the home of the buyer itself is considered the security or collateral.

 Just so you know, the concept or mortgages goes back to ancient Babylon. It was also present in the records of the Roman Empire. From the 1600's onward, the mortgage evolved into the form that most people recognize today. 

  In a standard home mortgage, payments of principal and interest are made from time to time in equal installments, usually each month. While the amount of each installment may not necessarily vary, the proportion of the payment being applied to the principal and the interest will change.
The debt incurred from a conventional mortgage is amortized over a period of many years, depending on the term of the mortgage loan. At the beginning of the mortgage loan, a larger portion of the payment is applied to the interest charges. Later on, a larger portion will be applied to the principal. Through a combination of principal and interest payments, the entire debt will eventually be repaid by the time the mortgage loan term ends. These loans are also known as self-liquidating mortgages.

  Home mortgage loans are the easiest mortgages to obtain, but they usually will require a sizable down payments of up to twenty or thirty percent. While this is not set in stone, it is quite common, so prepare accordingly.

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