Mortgage, loan and property. What is a mortgage?

A mortgage is putting a property as a guarantee to a lender as a security for a mortgage loan.

While a mortgage in itself is not a liability or a dept, it is evidence of a debt. It is a transfer of an interest in property, from the owner to the mortgage lender, on the condition that this interest will be returned to the owner of the property when the terms of the mortgage have been satisfied or concluded.

In other words, the mortgage is a guarantee for the loan that the lender makes to the borrower. In all but a very few states, a mortgage creates a lien on the title to the mortgaged property.

Tuesday, May 20, 2008

Home affordability improves

With prices falling across the nation, home affordability price has improved significantly in many U.S. cities.

Accordingly, 53.8% of all new and existing homes sold the country during the first three months of 2008 were affordable to families earning the median household income of $ 61,500, according to the latest Housing Opportunity Index published Tuesday by Wells Fargo and the National Association of Home Builders (NAHB).

That's up from 44% during the first three months of 2007 with more affordable prices they have ever been since the three-month period that ended June 30, 2004.

"Three factors combined to increase housing affordability," said Sandy Dunn, NAHB President, in a press release accompanying the report. "Mortgage rates returning to near the record low levels of a few years ago, a $2,500 rise in family income nationwide (from 2007 to 2008) and lower house prices."

Home prices have dropped by about 8% compared to a year ago, according to NAHB, but that does not mean that buyers are running back on the market.

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