Mortgages- Money For the Needy

Sometimes we just find ourselves in situations where there is a need for money, but no resources to obtain it. That is when the concept of mortgages works out and helps those in need. A mortgage loan which is sometimes referring as the mortgage, to use one’s personal resources such as property, land, home, jewelry or any other movable or immovable things as a guarantee for the loan.

How does the mortgage system work?

In general, there are two people involved in a simple mortgage transaction, a debtor, and a creditor. The debtor is the owner of the property (the person who pledge the property to mortgage) while the creditor is the holder of the fund (mostly cash based). When the transaction takes place, the debtor receives money the loan engaging him in a written promise to pay the loan back to him. The process includes some documentation, including legal works, and signing an agreement stipulating to pay a certain amount of interest as agreed to pay at regular intervals, or monthly or at the time of closing the mortgages, along with the principal amount.

What happens if the mortgage is not able to pay back in time?

If the mortgages are not able to pay back on time, the creditor receives the full authority to take control of the property placed as security for the loan by the debtor. This process is calling as the foreclosure of the mortgage agreement. The economy of a nation, for example, might go into a period of depression if the lent money to the debtors is unable to pay back. It has happened at many times since the inception of this concept.

Third party involvement in mortgage transactions

Sometimes there are mortgages brokers involved who do the following job:

  • Make inquiries regarding the financial status of consumers their requirements, objectives and motives for using the loan.
  • Based upon the terms agreed upon by both the consumer and the creditor, they decide whether it is feasible to carry the transaction forward or not.
  • After the transaction is over, the broker is supposed to access and move the deal further if agreed upon by both the parties.

Mortgages should be availed by the consumers only when they are fully able to meet the condition to pay back the loan amount along with agreed interest. Otherwise, it will be a trap you are setting up leaving no options to face the legal complications. So before engaging in such things, one should self-analyze or hire someone to know whether he is a qualified candidate for obtaining a loan. See mortgage brokers.

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