What is a mortgage??

Question

I know its to do with houses.

It may sound stupid, but I don't actually get what one is?

Or why do you need/get one??

Thanks in advance.

Answer 1

A mortgage is a loan which relates soley to the 'purchase of property'.

A personal loan is something you can use to buy anything.

Why do you need a mortgage ?

A hosue is a MAJOR PURCHASE thus the loan is generally a major sum of money, therefore the lender requires your home as collateral until the mortgage/loan is fully paid as security for themselves.

I hope this makes sense.

Answer 2

its what u use to pay for ur house. like a loan.

you need one to buy a house.

Answer 3

A mortgage is taken out by a person seeking to buy a property, eg a house. The money is lent, usually over a period of 25 years and the loan is secured on the house itself.

If the person defaults on a mortgage, then the bank or other lender may take the house to regain the money it has lost.

Answer 4

A mortgage is a loan to obtain a home that you are interested in purchasing if you don't have cash.

A mortgage is the pledging of a property to a lender as a security for a mortgage loan. While a mortgage in itself is not a debt, it is evidence of a debt. It is a transfer of an interest in land, from the owner to the mortgage lender, on the condition that this interest will be returned to the owner of the real estate when the terms of the mortgage have been satisfied or performed. In other words, the mortgage is a security for the loan that the lender makes to the borrower.

The term comes from the Old French "dead pledge," apparently meaning that the pledge ends (dies) either when the obligation is fulfilled or the property is taken through foreclosure.[1]

In most jurisdictions mortgages are strongly associated with loans secured on real estate rather than other property (such as ships) and in some cases only land may be mortgaged. Arranging a mortgage is seen as the standard method by which individuals and businesses can purchase residential and commercial real estate without the need to pay the full value immediately. See mortgage loan for residential mortgage lending, and commercial mortgage for lending against commercial property.

The measurement of a mortgage with regards to cost to the borrower can be measured by Annual Percentage Rate (APR) or many other formulas for true cost such as Lender Police Effective Annual Rate (LPEAR).

In many countries it is normal for home purchases to be funded by a mortgage. In countries where the demand for home ownership is highest, strong domestic markets have developed, notably in Spain, the United Kingdom, the Commonwealth of Australia and the United States.

Answer 5

Most people can not buy a house or a car for cash. In both cases they get a loan and pay off that loan over time in monthly payments. On a car you might be making monthly payments for 5 years. On a house you could be making payments for up to 30 years. The loan on the house is called a mortgage.

Answer 6

It is a loan from a bank or building society to buy a house.

Answer 7

Its where you get a loan, but your house is collateral.

Answer 8

A special loan formulated for people wanting to buy a house. Some estate agencies have their own mortgage advisers/brokers.

Answer 9

Where borrow money from a bank and keep you in debt for the rest of you life.

Answer 10

Man you're right: that DOES sound stupid.

Answer 11

It's a bank loan taken out against your house (so effectively the bank owns your house until you pay them back). Usually you put down a deposit, and pay the rest back over an agreed period of time with added interest.

There are lots of different kinds of mortgages to suit your needs though (paying back only the interest on the loan then a lump sum at the end for example).

Hope that helps!