Mortgage Loans are loans that are made to purchase or refinance real
estate and the loan is secured by the real estate property. If you make
all your payments you will own the real estate some day and if you do
not pay your monthly payments as agreed, you will probably loose your
real estate and you will not own it after foreclosure.
The laws in our country allow for a lender to take your real estate as
security to make sure you will pay the lender back the money you
borrowed to buy your real estate. If everything goes as planned, you
will make all the monthly payments on time and when the loan balance
reaches zero, you will get a release of mortgage in the mail from your
lender and you finally own your real estate free and clear.
Then again, if for some reason you cannot pay your monthly payments to
your lender for the real estate you bought, you will probably get a
notice of foreclosure in the mail and then the courts will decide if you
owe the lender money, and if so, they will usually allow the lender to
take possession of his collateral, which is your real estate. In the
current economy, we are seeing a lot of people loosing their real estate
for non payment of their debt.
The courts are allowing the lenders to come in and foreclose the real
estate mortgages that the lenders have in file and make the occupants
leave their property. Not all mortgage loans get foreclosed, and
actually only a very small percentage of real estate loans go through
the foreclosure process. Most people buy their homes with a mortgage
loan and then make their payments as planned and usually repay the
lender in full by the due date of their loan.
Mortgage loans have opened up the way we can buy real estate and homes
in our country because it allows us to put a little down payment into
the deal while borrowing the majority of the money so we can leverage
our way into the real estate. If we are lucky and the property goes up
in value, we may make a profit if we sell the real estate. If the value
has gone down, like in many parts of our country today, you could see
that you owe more than what you have borrowed. Ouch!
Mortgage loans are good for all the parties involved in real estate. It
is good for the lenders because they believe they will have someone
living in the home that will take care of the home and repay the loan as
planned. It is good for the buyer because most people want to buy and
live in their own home. We all want to feel that we are working for
something and at the end of the day, we will have something to show for
With the economy slowing down today, the interest rates on mortgage
loans are at a historical low and now may be a great time to think about
buying or refinancing your mortgage loan. With lower interest rates,
more money will go toward paying down your principal amount each month
than before with a higher rate.