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.

Wednesday, April 16, 2008

Residential construction plunged in March

Residential construction fell to its lowest level in 17 years in March in the United States.

According to the monthly report published Wednesday by the department of Commerce, the number of new home constructions in March moved back by 11.9% compared to its level of February and down 36.5% compared to that of March 2007.

The number of completed constructions last month dropped by 2.7% compared to February and 24.5% compared to March 2007.

As for the building permits, they were 5.8% less in March than in February. Compared to March 2007, the fall is an incredible 40.9%.

Monday, April 14, 2008

Higher-income who don't qualify for rebates are getting a better deal than those who do!

According to an article published on, if you do not qualify for rebates because you have adjusted gross income of more than $174,000 ($87,000 for singles) you are arguably getting a better stimulus deal than the 130 million taxpayers to whom Uncle Sam is sending payments.

The government stimulus package moves up the maximum size of a "conforming" mortgage to $729,750 from the previous high of $417,000. A conforming mortgage is a mortgage that can be sold to Fannie Mae (FNM) or Freddie Mac (FRE, Fortune 500), and it carries a lower interest rate than the big loans that exceed those limits. Note also that the maximum mortgage that can be insured by the Federal Housing Administration has also risen to $729,750. For people in high-home-price areas, these new maximum mortgages are now high enough to matter.

This new higher limit translates into cheaper refinancing or a higher sales price, because the lower interest rate means buyers can presumably afford to pay a higher price.

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