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.

Friday, May 30, 2008

U.S. consumers slow down their spending pace

"Consumers still spend, but just enough to follow the price increases and nothing more," said independent economist Joel Naroff.

The household consumption expenditure slowed in April, rising by 0.2% compared to March. Their incomes also rose by 0.2%, indicated Friday the Department of Commerce. These increases are in line with analysts' expectations.

For March, the increase in expenditure was left unchanged at 0.4% but the revenue was revised upwards to 0.4%. The disposable income after taxes increased by 0.2%, which is the lowest increase since April 2007. It was also the first time since that date that wages decreased.

"Consumers still spend, but just enough to follow the price increases and nothing more," said independent economist Joel Naroff. "Maybe the rebate checks will boost the figures for May and June, but it is difficult to say to what extent," he added.

Inflation has also went down, the price index linked to the consumption expenditure (PCE) rising by 0.2% in April against 0.3% in March. The index measured excluding food and energy, which is the one preferred by the central bank, increased by 0.1% (after +0.2%), an increase in line with analysts' expectations.

For both indices, it is lowest increase since February.

On a yearly basis, inflation reached 3.2% for the overall index in April and 2.1% for the index base (as in March for both indices).

Adjusted for inflation, the figures show that disposable income has stagnated in April like is has in March. Actual expenditures also remained stable (after +0.1% the previous month), households buying fewer goods (-0.2%) but more services (+0.1%). The savings rate increased to 0.7% of disposable income, like in the two previous months.

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