Facts to Keep in Mind about Mortgage Loan Payments
People trying to obtain mortgage finance with or without broker intervention have to take care of a few aspects about such loan and repayments. But even before that it is necessary for them to know what mortgage loan really means. Mortgage Loan Features Mortgage loan is a secure loan. Usually real property works as the security. Mortgage note is used as mortgage tool by the mortgage lender. Mortgage evidences existence of encumbrance on the property mortgaged. Normally the term "mortgage" is used to indicate mortgage loans.
How Mortgage is Obtained A factor having major bearing on the mortgage loan payment is the type of mortgage one has availed and the source for such finance availed. Such mortgages are obtained either directly or indirectly using the services of some intermediaries. Characteristics of Mortgages that Influence Payments Most of the times, the type of mortgage influences the payment schedule prepared by loan officer in mortgage markets. Some of the important factors are the followings. Size of the loan obtained. Maturity period of the loan. Rate of interest decided mutually. Methods of repayment of the finance given. Some minor characteristics may vary considerably. Factors Influencing Mortgage Loan Payments With numerous lenders in the market and matched more than adequately by the number of borrowers, there are certain factors that effect the mortgage loan repayments substantially.
Mortgage interest rates could be fixed or variable. Variations are also there in the methods of payments. Repayment will largely depend on locality, taxation laws as well as the prevailing culture. Various types of instructions on repayments are issued according to the type of the borrower. Common Ways of Mortgage Loan Repayments Some of the common ways of mortgage loan repayment are as follows. Paying the capital and interest over a set period of time regularly. It is known as amortization in United States and repayment mortgage in U.K. Repayments are scheduled by lenders on time value of money formula. Interest rates may vary depending on the location and local rates. In some places it may be calculated on 360 days instead of 365 days basis. Last but not the least; there could be legal restrictions either federal in nature or specific to the location as well as the applicability of consumer protection laws in case of mortgage financing.
