Current Affairs Ta 15/12/2018
2018-12-15 13:00:08
Day Special
December 15, TN Shishan's birthday
➡ Full name: Tirunelai Narayan Array Shishan
➡ Born: December 15, 1932 ........
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A mortgage is an agreement that allows a borrower to use property as collateral to secure a loan.
In most cases, the term refers to a home loan: When you borrow to buy a house, you sign an agreement saying that your lender has the right to take action if you don’t make your required payments on the loan. Most importantly, the bank can take the property in foreclosure — forcing you to move out so they can sell the home.
The sales proceeds will be used to pay off any debt you still owe on the property.
A Mortgage Is an Agreement:
The terms “mortgage” and "home loan" are often used interchangeably. Technically, a mortgage is the agreement that makes your home loan possible — not the loan itself. For real estate transactions, agreements need to be in writing, and a mortgage is a document that (among other things) gives your lender the right to foreclose on your home.
Mortgages Make It Possible to Buy
Real estate is expensive. Most people don’t have enough cash in savings to buy a home, so they make a down payment of 20 percent or so and borrow the rest. That still leaves the need for hundreds of thousands of dollars in many markets. Banks are only willing to give you that much money when they have a way to reduce their risk.
Safer for banks: Banks protect themselves by requiring you to use the property you're buying as collateral. To do so, you "pledge" the property as collateral, and that pledge is your "mortgage." In the fine print of your agreement, the bank gets permission to put a lien on your home so that they can foreclose if needed.