| General Mortgage Information |
My Finance Consulting:
My Mortgage:
What is a Mortgage?
We define a mortgage as a method of using either personal or real property
as security for the acquisition and repayment of a debt. The term mortgage
has its origin in Middle English from Old French, which literally means "dead
pledge". As such a mortgage is also the legal device used in securing the
property, but it is also commonly used to refer to the debt secured by the
mortgage, the mortgage loan.
In most countries mortgages are strongly associated with loans secured on
real estate (land or house and land) as opposed to other property (such as
automobiles, computers or ships) even if their value may be comparable to
that of real estate.
Arrangement for acquisition of real estate whether for individual residential
or commercial purposes is normally done using a mortgage. As such a
mortgage has become the standard method by which both individuals and
businesses can purchase residential and commercial real estate without
having to pay the full value of the property immediately. The term mortgage
loan is normally used for residential mortgage lending, while commercial
mortgage is used for lending against commercial property.
Demand for mortgages tends to be highest in rich countries like the United
States and the United Kingdom, and most of Western Europe where the
demand for private home ownership is strongest. However, there is also
growing demand for mortgages in several emerging economies and luxury
homes on many Caribbean islands.
as security for the acquisition and repayment of a debt. The term mortgage
has its origin in Middle English from Old French, which literally means "dead
pledge". As such a mortgage is also the legal device used in securing the
property, but it is also commonly used to refer to the debt secured by the
mortgage, the mortgage loan.
In most countries mortgages are strongly associated with loans secured on
real estate (land or house and land) as opposed to other property (such as
automobiles, computers or ships) even if their value may be comparable to
that of real estate.
Arrangement for acquisition of real estate whether for individual residential
or commercial purposes is normally done using a mortgage. As such a
mortgage has become the standard method by which both individuals and
businesses can purchase residential and commercial real estate without
having to pay the full value of the property immediately. The term mortgage
loan is normally used for residential mortgage lending, while commercial
mortgage is used for lending against commercial property.
Demand for mortgages tends to be highest in rich countries like the United
States and the United Kingdom, and most of Western Europe where the
demand for private home ownership is strongest. However, there is also
growing demand for mortgages in several emerging economies and luxury
homes on many Caribbean islands.
Do I need a Mortgage? Why not simply rent instead?
Well, the short answer is yes, you do need a mortgage and here is the simple reason why. People who rent property tend to remain poor throughout their lives, while those who acquire a mortgage tend to become rich. This is indeed the case throughout the United States - at the turn of the century the median net worth of the average home-owner was about thirty five times the median net worth of the average renter. Your net worth means the dollar value of all your assets and liabilities taken together. Home-owners tend to have a higher net worth than renters because when you take a mortgage you build equity in the property throughout the period of the mortgage and the property finally becomes yours when the mortgage is paid off. Renters by contrast do not build equity in the properties they rent, hence they remain poor. |
| Copyright © Finance Consulting Inc. 2007 All Rights Reserved. |
Finance Consulting Inc.