Mortgage Lending

Mortgage lending is the process of issuing mortgage loans. A mortgage loan is received by securing a real property. Usually, a mortgage loan is taken out to buy a house or some real estate. In mortgages, the real estate itself functions as collateral to the loan.
A mortgage is a process in which a property (real or personal) is used as security for the repayment of a loan. A mortgage loan can be taken for buying a commercial or personal real estate property. In a home mortgage loan, the house that is to be bought is kept as security or pledge.

If there is a default on behalf of the borrower, the bank holds the claim on that house. The regular repayment of the mortgage loan amount brings down the principal and this process is known as amortization of the mortgage loan.

Home mortgage or residential mortgage is the main device for financing private ownership of residential properties in many countries. The amount of a mortgage loan is often dependent on the concerned person’s credit ratings or history.

The parties involved in a mortgage transaction can be categorized into two types:

The borrowers of mortgage loans are also known as originators
The lending institution Factors regulating mortgage lending include:
interest rates, which may be fixed for the whole life of the loan or variable where the interest rate can go up or go down
term of the mortgage loan
payment amount and frequency
prepayments

Normally there are two types of amortized loans.

They are:
Fixed Rate Mortgage (FRM) and
Adjustable Rate Mortgage (ARM) or floating rate or variable rate mortgage.
The mortgage quote is the total benefits and costs associated with a mortgage. There are various ways of receiving a mortgage quote which may include the services of a mortgage broker or communicating directly with a mortgage lender.

There are various ways of repaying the mortgage loan.

They are:

Capital & Interest Repayment
Interest Only Repayment
No Capital or Interest Repayment
Interest and Partial Capital Repayment
Foreclosure and Non-Recourse Lending

The different types of mortgage loan include the following:

Assumed mortgage
Blanket loan
Balloon mortgage
Budget loan
Bridge loan
Buy down mortgage
Commercial loan
Foreign national mortgage
Graduated payment mortgage loan
Hard money loan
Jumbo mortgages
Package loan
Participation mortgage
Reverse mortgage
Repayment mortgage
Seasoned mortgage
Term loan or interest-only loan
Wraparound mortgage
Negative amortization loan
Non-conforming mortgage
Equity loan

The mortgage lending institutions include the following:

ABN AMRO
Countrywide Financial
GMAC Mortgage
American Financial Mortgage
CitiFinancial
Ginnie Mae
Fannie Mae
Freddie Mac
Global One Lending
Dollar Bank
Genworth Financial
Wells Fargo
Mortgage Choice
NyKredit
IIB Bank
E-Loan
Chevy-Chase Bank

For further details, please refer to the following links:

 

More Information on Mortgage
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Mortgage Lending Mortgage Companies UK

Last Updated on : 24th August 2013