Mortgage finance

In most countries, mortgage lending is used as the primary source for financing properties. Mortgage Finance deals with the borrowers of loan, lenders of national level and brokers, who act simultaneously for making a fruitful deal for a new real estate production.

Why should I be aware of this?

Your dream of owning a home can come with a cost that goes beyond the real estate mortgage. Like most investments a real estate mortgage too can involve scams.

Like so many things a real estate mortgage too can involve scams which can cost you thousands of dollars in interest due to high fees and additional undisclosed cost. The worse case would be losing your home to foreclosure.

All about mortgage finance

There are basically two types of mortgage finance:

Residential Mortgage

Here, the home or property which is meant to be bought is pledged to the bank by the buyer of the home. If the buyer defaults in payment then the bank has all the rights for claiming the house.

Commercial Mortgage

This is basically a loan done by the business entities (partnership firms, incorporated businesses, or limited companies) where the concerned real estate is used as collateral for securing the repayment of the same and other corresponding issues related to financing of the commercial property (commercial building or other business estate).

Commercial mortgage finance are non-recourse loans, where if the proceed from the sale of the mortgaged home are not sufficient to cover the outstanding debt then the mortgagee may not have recourse to the mortgagor after foreclosure.

In most mortgage terms there is the requirement for a down payment of some percentage of the loan. Typically the down payment must be 5% to 20% of the mortgage, although, there are some mortgages available that do not require a down payment. One advantage of paying a larger down payment of 20% or more is that the debtor is often not required to carry PMI or mortgage insurance.

CopperBytes

• When a mortgage underwriter reviews customers' credit profiles and income histories, what's happened in the past two years holds a lot of weight as to what their future will be.
• If your future is difficult to substantiate, your past history is what a mortgage underwriter considers.
• Your credit score is a reflection of your past. It's a great indicator of what your future will be
• A lender is going to always count what can be verified, not what the future will hold - no matter how rosy it appears

References:

• What You Should Know About the Real Estate Scam