A mortgage loan or simply mortgage () is a loan used either by purchasers of real property to raise funds to buy real estate, or alternatively by existing property owners to raise funds for any purpose while putting a lien on the property being mortgaged. The loan is "secured" on the borrower's property through a process known as mortgage origination. This means that a legal mechanism is put into place which allows the lender to take possession and sell the secured property ("foreclosure" or "repossession") to pay off the loan in the event the borrower defaults on the loan or otherwise fails to abide by its terms. The word mortgage is derived from a Law French term used in Britain in the Middle Ages meaning "death pledge" and refers to the pledge ending (dying) when either the obligation is fulfilled or the property is taken through foreclosure. A mortgage can also be described as "a borrower giving consideration in the form of a collateral for a benefit (loan)".
Mortgage borrowers can be individuals mortgaging their home or they can be businesses mortgaging commercial property (for example, their own business premises, residential property let to tenants, or an investment portfolio). The lender will typically be a financial institution, such as a bank, credit union or building society, depending on the country concerned, and the loan arrangements can be made either directly or indirectly through intermediaries. Features of mortgage loans such as the size of the loan, maturity of the loan, interest rate, method of paying off the loan, and other characteristics can vary considerably. The lender's rights over the secured property take priority over the borrower's other creditors, which means that if the borrower becomes bankrupt or insolvent, the other creditors will only be repaid the debts owed to them from a sale of the secured property if the mortgage lender is repaid in full first.
In many jurisdictions, it is normal for home purchases to be funded by a mortgage loan. Few individuals have enough savings or liquid funds to enable them to purchase property outright. In countries where the demand for home ownership is highest, strong domestic markets for mortgages have developed. Mortgages can either be funded through the banking sector (that is, through short-term deposits) or through the capital markets through a process called "securitization", which converts pools of mortgages into fungible bonds that can be sold to investors in small denominations.
In 2014, I bought a house for $71,000. I paid a down payment of approximately $4,000. Then I paid for the rest of the $67,000 with a 30 year mortgage with a fixed rate of 4.5%.
Here is how my mortgage works: I have to make monthly payments to my mortgage company. The amount of interest that is...
I don't know how things are changing globally, but over here the bank rates are slowly going up. In conjunction, I've been reading articles from my bank that say that it would be a good time to go from a variable-rate mortgage (where the rate is adjusted every 3 months) to a fixed-rate mortgage...
Hi I need help with this review question for a class I missed.
A home you want to purchase is priced at $1,000,000. You have $60,000 available for a cash down payment. You borrow the remainder through a mortgage with a closed 5-year term and 25-year amortization at an interest rate of 2.75%...
For #8b ( https://www.docdroid.net/5W4Imc9/question.pdf ), I don't understand how $104,771.14 is obtained.
#8 re-typed here for your convenience:
A family has a $130,000, 25-year mortgage at 4.2 %, compounded monthly.
a) Find the monthly payment.
b) Find the unpaid balance after 15 years.
c)...
Homework Statement
Your friend tells you he has a very simple trick for taking one-third off the time it
takes to repay your mortgage: Use your Christmas bonus to make an extra payment
on January 1 of each year (that is, pay your monthly payment due on that day twice).
If you take out your...
Homework Statement
If a bank issues a mortgage to a borrower, let's say that it was for $P, for t years with an annual interest rate i% compounded monthly. Then, to the bank, can this essentially be treated like a bond with price $P, coupon rate i% and maturity t years?
It could be...
The title of the thread is the same as this blog post at http://www.scientificamerican.com/blog/post.cfm?id=is-speculation-in-multiverses-as-im-2011-01-28&WT.mc_id=SA_SA_20110216 about Brian Greene's new book, The Hidden Reality: Parallel Universes and the Deep Laws of the Cosmos. A snippet:
My...
Ok, Here is the assignment:
Develop a mortgage payment calculator. Design a GUI to enter price of home, down payment, interest rate. Your bank only offers 10, 15, and 30 year mortgages. Use grouped radio buttons to select between 10, 15, or 30 year mortgage. Monthly payment should be...
Anyone Understand Obama's "Mortgage Modification"?
A woman I know here just refinanced her house apparently according to Obama's "Mortgage Modification". The lender quoted her a very good fixed interest. Then, on the day of the signing (yesterday) they suddenly told her the interest had to be...
Homework Statement
Homework Equations
The Attempt at a Solution 80,000(((.095x)/(1-(1+(.095/12)))^12x)-1) keep getting errors with graph and can't answer it.
The US has taken over Freddie Mac and Fannie Mae, the two biggest privately owned mortgage lenders in their country.
They fired and replaced the CEO's and board of directors.
They will now conduct the day to day operations of the companies.
They are taking money away from the investors...
First, I wanted to thank you for reading this thread. I'd also like to apologize up front and let you know that I am a complete novice and bow at the feet of the people who both read and respond in this forum. I've been searching for the answer to my question (more on that further down) and felt...
Homework Statement
alice wants to take out a 20 yr mortage. the interest rate is 8% compounded semi-annually. alice can afford monthly payments of $850. what is the largest mortage that she can afford?
Homework Equations
The Attempt at a Solution
this is using a graphing...
The current interest rate is 8.7%/a interest is compounded semi-annually and calculated monthly. The couple that is borrowing $90 000 for their new home wants to know how much it will cost them each month to pay off the loan. Assume they will make one payment per month. Calculate the monthly...
Ron and Lynda are purchasing a new home. They will need to borrow $90 000 for the home.
The amortization period which best fits their financial situation is 25 years, Discuss why this might be so?
I have no idea why? They don't give enough information only what Ron and Lyda are borrowing...
Today, the FBI and mortgage industry professionals believe 10-15% of all loan applications contain material misrepresentations, i.e. fraud. Many times these fraudulent loans end up in foreclosure resulting in financial losses to mortgage lenders. Unfortunately, many lenders recoup these...
I am a junior doing a major in electrical engineering, with a minor in mathematics (maybe a double major). The university I am going to doesn't have a masters program for electrical engineering though. I am also a non-traditional student (in that I am in my late twenties, and didn't start...
A bank's basic function is to "borrow short and lend long". In other words, it borrows money from depositors over the short term, promising to repay it on demand, while it lends most of that money out over the long term to borrowers, for instance in the form of 30-year mortgages. This...
The Great Recession and aftermath have apparently changed perceptions regarding home ownerhip and financial security.
The New American Dream: It's Not What You Think
http://finance.yahoo.com/news/american-dream-not-think-173054394.html
Usually owning a home means going into debt, i.e...
Hello all,
I am an applied math/physics major who wishes to land on a finance-related jobs (including insurance) with a bachelor's degree. The coursework includes ODEs, PDEs, Calculus of Variations, Numerical Analysis, etc., with three faculty elective courses. Here is a list of courses that I...
I have a BS in MechE, and work in R&D. I've been plugging away at my MS in MechE, about halfway through, and have been considering that a PhD may really be more intellectually and personally what I want.
I've spoken to some old professors and friends with doctorates. I don't think I'm ready...
Mortgage Calculation Differences??!
So, I'm doing some mortgage calculations and I am finding some discrepancies between using the mortgage calculators on bank websites and by using the formula on paper on in excel.
For the following mortgage:
P= 200,000
I = 6.5%
N = 30 Years
Using the...
I am a non traditional student, 28 year high school dropout, who is starting on my third year of college majoring in astrophysics with the intention of earning a minimum of a masters either in physics or engineering. I am also going on my 7th year as a bicycle mechanic. I used to love my job but...
Finally, something being done for homeowners that lost their homes without proper evaluation.
http://news.yahoo.com/us-banks-send-checks-4-153752525.html
This link really ticked me off
http://beta.fool.com/equityfinancials/2013/04/07/undervalued-financial-stock-yielding/29465/?source=eogyholnk0000001
You think we would have learned the lesson the last crash around...
Hey guys. Thanks for reading. I haven't done any regular algebra in a long time and feel like I am just too rusty to see something that I should be seeing. I am weighing the option of buying a house vs. renting for a year and then buying (giving me a larger down payment and a better apr on the...
I'm trying to create and then solve A D.E. that deals with mortgage amortization and mortgage prepayments. By playing around with the prepayment option on mortgage amortization calculator at http://mortgage-x.com/calculators/extra_payment_calculator.asp , I found that the ratio of money saved at...
Homework Statement
House one is going for 250.000 in the suburb and has a new power plant being built and also has a decrease in crime. House two is also 250.000 in city has an increase crime rate but has a new school being built. What house will be the best value in a 10 year span if you buy...
The Federal Reserve announced an indefinite $40 billion per month round of quantitative easing. This new phase of easing will combat a weakening economy, strengthen confidence in the financial system and assure that the central bank's mandates on unemployment/housing are met...
Hello. So I have posted once, and I decided what I want to do kinda. I am going to spend the next year really learning the industry I am in (mortgages) and anatomy (because I am into weight lifting) and economics (because that is easy for me) and because honestly, I don't have enough money to...
I'm trying to prove a point to someone about compounding periods and mortgage payments. Interest is calculated as $ = P(1 + I/x)^x where P is how much you borrowed, I is "annualized" interest rate and x is how many compound periods are in a year. For example, a credit card at 20% compounded...