What is a mortgage & What does it mean to you?

What is a mortgage? As defined by the Oxford Concise Dictionary

• noun 1 a legal agreement by which a person takes out a loan using as security real property (usually a house which is being purchased). 2 an amount of money borrowed or lent under such an agreement.

• verb transfer the title to (a property) to a creditor as security for the payment of a loan.

My personal Favourite

— ORIGIN Old French, ‘dead pledge’. (with thanks to www.askoxford.com)

Many of us have a mortgage but don’t really know what it means.

The important thing is to look at the fine print and the features of a mortgage. Not just the interest rate. The wrong type of mortgage can cost you thousands. Conversely, spending the time to choose the correct mortgage can save you thousands.

How does does a mortgage work

A legal charge over your property as insurance for money lent to you. If you default on your payment the lender (mortgagee) has the legal right to take possession of your property and sell it to pay back the debt.

Types of mortgage

There are many types of mortgage which we’ve gone into elsewhere

What is a repayment mortgage

from repayment mortgages to interest only to offset through to reverse mortgages. Payment calculators, worksheets and budgets

Important points to remember

Take your time. Understand the different types of loans available and more importantly ask the question why is this loan better for me than this other loan?

Use a mortgage calculator to ensure you can afford the repayments.

Still confused?

Speak to a professional – financial advisor or mortgage broker

A great source of various companies are listed on: Dmegs Web Directory

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