To have something mortgaged means to give someone else ownership over it. If I own my house, then I am its owner. But if I borrow money from my friend and he owns the house, then he has ownership of the house.
The person who takes out a mortgage is called the mortgager. He/she is borrowing money from the lender.
4. Mortgaged Property
The property being purchased is referred to as mortgaged property. This means that someone has already paid for the land, and now they have to pay you money in order to own it.
5. Mortgage Broker
A mortgage broker is a person who helps people find mortgages. They do not actually give out the loans but instead refer clients to lenders. Clients typically provide their credit scores to brokers, and then they match borrowers with lenders based on those numbers.
6. Mortgage Lender
A mortgage lender is a company that provides loans to individuals or businesses. These loans are then packaged into securities and sold to investors.
7. Mortgage Insurance
Mortgage insurance (also known as private mortgage insurance) protects lenders against losses if a borrower fails to repay a mortgage. This type of insurance is often required if the amount borrowed exceeds 80% of the home’s value.
8. Interest Rate
Interest rate is the amount that you pay for borrowing money from a bank or other financial institution. This is usually expressed as a percentage of your total loan amount. If you have a $100,000 mortgage at a 5% interest rate, then you would pay $5,000 per year in interest payments.
The term refers to how long you are paying off your mortgage. A 30-year fixed-rate mortgage has a term length of 30 years. You can choose any term between 1 month and 99 years.
10. Annual Percentage Rate (APR)
Annual Percentage Rate (APR), sometimes called the APR, is the cost of your mortgage divided by the number of months in a year. So if you had a 15-year fixed-rate loan with an APR of 7%, this means that for every $1,000 borrowed, you would pay $7 in interest over the course of 15 years.