This article is about real estate mortgage lending. Features of mortgage loans such as the size of the loan, maturity of the loan, interest rate, method of paying off the loan, and other characteristics can types of mortgage in india pdf considerably.
In many jurisdictions, it is normal for home purchases to be funded by a mortgage loan. Few individuals have enough savings or liquid funds to enable them to purchase property outright. All types of real property can be, and usually are, secured with a mortgage and bear an interest rate that is supposed to reflect the lender’s risk. Property: the physical residence being financed.
The exact form of ownership will vary from country to country, and may restrict the types of lending that are possible. In such a situation, the initial lender is known as the mortgage originator, which then packages and sells the loan to investors. A closed mortgage account is said to be “redeemed”. Many other specific characteristics are common to many markets, but the above are the essential features.
Other aspects that define a specific mortgage market may be regional, historical, or driven by specific characteristics of the legal or financial system. The most basic arrangement would require a fixed monthly payment over a period of ten to thirty years, depending on local conditions. In practice, many variants are possible and common worldwide and within each country. The price at which the lenders borrow money therefore affects the cost of borrowing. Once the mortgage application enters into the final steps, the loan application is moved to a Mortgage Underwriter. The Underwriter verifies the financial information that the applicant has provided to the lender. Verification will be made for the applicant’s credit history and the value of the home being purchased.
An appraisal may be ordered. The financial and employment information of the applicant will also be verified. The underwriting may take a few days to a few weeks. Sometimes the underwriting process takes so long that the provided financial statements need to be resubmitted so they are current. It is advisable to maintain the same employment and not to use or open new credit during the underwriting process. Any changes made in the applicant’s credit, employment, or financial information can result in the loan being denied. There are many types of mortgages used worldwide, but several factors broadly define the characteristics of the mortgage.