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 27, 2008

Still No Joy In British Home Prices

According to Forbes.com the slump in property prices that began nearly a year ago in Britain is showing no signs of slowing down, a gloomy survey showed on Monday.

The Hometrack’s House Price Survey showed a uniform downturn in the British housing market in May, with prices dropping 0.5% from April and 1.9% from the previous year.

A decrease in interest rates by the Bank of England would help the housing market by easing payments for holders of adjustable mortgages and for new buyers, but at the risk of a greater inflation level.

The current deteriorating sentiment heightens the risk that house prices could plunge sharply over the next couple of years.

While new housing data in Britain seems dire, only those homeowners who made their purchases around the market's peak last summer are expected to face the dire condition of owing more on their homes than they paid for them.

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