Ultimate Guide to Mortgages

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What Is a Mortgage?

A mortgage is a transfer of an interest in real estate as security for repayment of a loan. The real estate lien on your property through your bank or financial institution for money borrowed to pay for the property. A mortgage transaction usually involves someone who is purchasing a home borrowing money from a lender in order to buy said home and entering into a written agreement with the lender for that loan. The real estate then exists as collateral for the loan. In the event the homeowner defaults on the loan, the lender may foreclose on the property and have it sold to reduce the debt.

The Loan Process

The loan process begins where the borrower, who is also known as the mortgagor, obtains a mortgage loan by an application. The borrower submits an application to the lender, who is also known as the mortgagee. The lender conducts a risk evaluation to determine whether a mortgage loan will be granted. If the lender approves the borrower, the lender will issue a loan commitment that details the loan amount, repayment terms, interest rate, and other pertinent conditions. When the borrower accepts, a contract is formed between the two parties.

How Many Different Types of Mortgages Exist?

There are several different types of mortgages out there, including:

Preparing for the Mortgage Application

There are many documents that a lender will request from you when processing your mortgage. It is a good idea to have these documents together before applying for a mortgage:

Mortgage Documents

When your lender approves you, the following are the most common mortgage documents you will encounter:

What Is a Mortgage Lender?

A mortgage lender provides the financial resources for the borrower in a mortgage loan relationship. The lender is usually a bank or a mortgage company. They provide the borrower with a variety of different loan products depending on the needs of the borrowers.

There are different types of mortgage lenders, such as:

Are There Legal Issues When Dealing With a Mortgage Lender?

Although mortgage lenders are subject to laws that were created to protect the borrower, there are instances where a borrower may run into some legal issues when dealing with mortgage lenders. Some of the more common disputes are:

What Options Do I Have If a Dispute Arises with My Mortgage Lender?

Disputes with a mortgage lender may require legal action. The following steps should be taken if you believe you have a dispute with your mortgage lender:

These steps may seem obvious, but they should be the first and strongest defense to a foreclosure.

Do I Need an Attorney?

When dealing with the complexity of mortgages, the accompanying documents, and a mortgage lender, it is wise to consult with a real estate attorney to ensure that your rights are protected. A real estate attorney can review all the pertinent documents and ensure that you are protected throughout the entire process. Additionally, if you find yourself embroiled in a legal conflict with a mortgage lender, an attorney can protect your rights as you fight your claim.

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Last Modified: 09-01-2015 10:08 AM PDT

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