What is a Mortgage?

  • A mortgage is a loan that a borrower takes when he/she needs to buy a home or some other type of real estate entity and agrees to pay back over a stipulated time span, as a series of regular payments or installments.

How do Mortgage Loans Work?

  • A mortgage is considered to be quite a secured loan since the borrowers can avail funds by providing their assets as collateral to the lender. It is generally sanctioned against an immovable asset like a house or a commercial real estate property. The lender gets to keep the asset as collateral for the duration while the borrower pays back the total loan amount.

Major Types of Mortgage Loans

Basic types of Mortgage Loans

  • Conventional or fixed-rate mortgage

  • Interest-only Mortgage

  • Adjustable-Rate Mortgage (ARM)

Special types for assistance for certain groups

  • FHA Loans or Federal Housing Administration Loans

  • VA Loans (approved by the US Department of Veteran Affairs)