What is a mortgage? A few years ago, the word «mortgage» was known only to specialists, but today it has become a part of our lives. But, despite many references, yet many people do not realize what a mortgage is and even more people do not know what the covenant mortgage is. The answer to this question is: this is the first responsible action in one’s person life to identify and realize his or her opportunity for buying own home.
The term «mortgage» is derived from the French word which meant «death contract. For the first time the term «mortgage» came into use at the turn of the VI-VII centuries BC in Greece, when they were called pole that was placed on the land borrower’s assets and contained the name of the creditor and the amount of the loan. In the event the borrower defaults in payment of the debt «mortgage» entitled the creditor to take borrowed part of the plot.
So, a mortgage today – is issued under the mortgage loan with the collateral, which is the basis of this credit is not transferred to the creditor, and remains the property of the debtor. The mortgaged property under the mortgage prohibition is imposed on the sale or renewal of it to another person until full repayment of the loan and all interest.
The covenant mortgage implies that the debtors relatives or any other person can buy the property which was bought for the money from mortgage if he or she will take the duty of repaying the remaining part of the mortgage. This term is vastly used in California and people in other parts of the USA usually do not know what the term “covenant mortgage” means.
Mortgage loan – is a long-term loan, were the borrower has to put in pledge the following kinds of real estate: apartments, residential home with land, business premises with the earth, the earth. Banks do not give mortgage loans every day. Dates when you can arrange a mortgage may different and depend on the bank and the type of loan program, the amount of the requested loan, and your ability to pay. The proposed time line for mortgages is mostly 3 – 5 years and 15 – 30 years.
Mortgage loans are issued by commercial banks, mortgage banks and credit agencies. Each commercial bank usually offers several programs with different mortgage terms and interest rates. But if you arrange a mortgage, you should always remember that you will immediately become the owner of the acquired property, and the loan and the interest is paid for your personal, rather than rental housing.