When you use your property as security for the payment of your debts, this process is called mortgage. The term mortgage refers to the legal device used in securing the property, but it is also commonly used to refer to the debt secured by the mortgage.They are mostly used while purchasing real estates where the individual can buy the property without making full value upfront. The mortgagor i.e. the borrower puts the property as security against the debt for the rest of the value of the property. This way, legally the title of the land goes to the lender and equity of redemption goes to the borrower. The lender receives a note evidencing the borrower's debt and obligation to repay, plus a lien on the subject property. Types of Mortgage Loans:

There are many different types of mortgage loans. However, the two most popular and basic types are
• Fixed rate mortgage (FRM)
• Adjustable rate mortgage (ARM)

FRMs are the traditional loans which have a fixed rate over the life of the loan, typically 30, 20, 15, or10 years. Perhaps the only increase you may see would be because of increase in the property taxes or insurance rates. But payments for principal and interest will be consistent throughout the life of the loan using an FRM. .In the UK this fixed term can be as short as five years, after which the loan reverts to a variable rate thus making the loan an ARM.

ARM usually starts at a lower interest rate however the rates and payments depend solely on market interest rates and thus keep fluctuating. Usually on the same terms if a borrower qualifies for the loan then the lender may transfer the mortgage to him .It is up to the borrower , if he wishes he can change an ARM to Fixed Rate Loan, at an interest rate anywhere from 0.5% to 2% lower than average 30 year fixed term.

There is another loan called the balloon loan where monthly payment due is calculated over a certain term, but the outstanding principal balance is due at some point short of that term. This can either be a Fixed or Adjustable in terms of the Interest Rate.

Mortgage Broker:

A mortgage broker can be very helpful when you plan to buy or refinance your property or when you feel the need of mortgage to consolidate your debts. He can spare you of all the troubles of running around from one place to another and help you save money and your precious time. A mortgage broker is solely an intermediate between you and the lender. They originate loans by providing loan processing and arranging for the provision of funds by lenders.

He can counsel you on the loans available from different lenders and also give you advice on any issues involved in qualifying for a loan, including credit problems. He would take your application, and help process the loan. Generally these brokers do not charge much and the rate of interest you get would be much lower than what you would have got if you had dealt directly with the lender. The mortgage broker works on the basis of contingency. Once the loan is closed, the mortgage broker is compensated. So, next time you want to buy a property you know what or how to get your loan.

Jeffrey Meier of Jam727 Enterprises offers detailed information about mortgages and other important topics in the Information Directory at http://www.Jam727.com

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