Mortgage, security, lender, borrower, interest and foreclosure are the terms commonly used in mortgage deal transactions. The mortgage is the security created by the money lender or the backup provided by him against the mortgage loan. The term ‘security’ used in mortgage transactions usually refers to the property, house or real estate provided as a backup. The borrower is a person who wishes to create an ownership right in his property. The lender secures the loan issued by him by listing the borrower’s property as mortgaged. The interest is the charge the borrower has to pay for using the lender’s money. Foreclosure implies that the lender may have to seize or repossess the borrower’s property under certain circumstances.

Aspects of mortgages

The interest, mortgage term, payment amount and frequency and prepayment form are the factors that determine the mortgage terms and conditions. Interest, can be fixed or variable or can change over stipulated periods of time. Term refers to the maximum number of years of mortgage, when completed will lead to the amortization of loans. In certain cases the borrower has the option to change i.e. increase or decrease the amount paid per certain period of time and its frequency. In case the lender pre-pays the mortgage loan, the lending agency can charge him additional fees for prepayment.

Sizes of the loan, interest rate, maturity of loan, method of repayment of loan etc. are the other features or aspects of mortgage loans. These features considerably affect the various other aspects of the loan.