Mortgage Loan

A loan which is secured by real property through use of a mortgage note. The amount of the loan is determined by several factors including the borrower’s credit score, payment history and the ability to repay. A mortgage loan is provided at a fixed rate or adjustable rate depending on the type and the terms and conditions of the mortgagor. The lender may also provide a fixed and adjustable rate mortgage.

For a mortgage loan provided at a fixed rate, the interest rate and the periodic payments remain fixed throughout the term of the loan. Therefore, the principal and interest repayment per month do not change over the whole term of the loan.

An adjustable rate mortgage loan depends on the market index to determine the interest charged. It may remain fixed for the first few years of the mortgage and then change depending on the prevailing interest rates in the market. The inflation rate and the general yield curve determine the adjustable interest rate. In case it decreases, you stand to benefit.

In order to land a good mortgage loan, it is advisable to seek the services of a mortgage broker. This is an intermediary who will do all the paperwork between you and the mortgage lender after assessing your needs. The mortgage broker will assist you to determine the appraised, estimated and actual values of the mortgage loan in order to enable you make an informed decision.