What is a Mortgage?
As professionals, we throw around terms that people don't understand. If you're not using them daily, you may not know what it is. So what is a mortgage?
A mortgage is a loan secured by real property, land or commercial property, or a house. When financing a home, a bank will loan them money on a property and take the first position on a deed. They have a special warranty deed where if you stop paying your payments, they get to secure the property. They'd often like to see you come up with a down payment and know that you have some skin in the game before they loan you the other 80%. A traditional mortgage is 80% of the house's value, and the borrower is on the hook for the additional 20%. Today, many products are available, and you can put as little as zero down and have just $500 out of pocket to buy a house(some restrictions apply).
These government programs will ensure the loan and absorb risk so that banks can loan a much more significant percentage than they usually would. There are a lot of products available where you can buy a house with minimum amounts down. Low down payments are made possible with products like FHA, USA, Section 184, VA, and some conventional mortgages. Talk to a licensed loan officer in the State of New Mexico today!
So what is a mortgage? A mortgage is simply a loan that's secured collateral is land or real property, land house, commercial building, condo; you get the point, it's real property!
Keep in mind that I am not a licensed loan officer, so any advice given is as a frequent spectator to the loan process and should not be taken as financial advice. Please consult a licensed loan officer in your State about the information here. Disclaimer: Don't sue me for this blog. I would be very sad.