Article Avenue - free articles and downloads - How Mortgages Have Changed The Face Of Homeownership

Although many go house hunting, and house buying, it is amazing how few people actually know what a mortage is and how a mortage works. It is also not uncommon for many to mis-label their mortage and instead call it a "home loan".

However, that term is totally misleading and inaccurate. The mortgage is basically a way of securing a debt to which the property is the security. In reality, this is not a true debt; instead it is the security required by the lender to protect their interests for the duration of the term of the loan.

Mortgages have in fact changed the face of house buying. A mortgage gives one access to purchase without the buyer having to pay the full cost upfront. To help understand how this works, some important information is discussed here. Being the financier, the mortgagee is the person (or institution) doing the lending to you, the mortgagor or borrower. Your home, the security, is in fact a lien which means the mortgagee has legal possession of your property until the debt is repaid.

The property you are buying does in fact become collateral for the finance that has been sought to pay for it. The property itself is the protection a mortgagee needs if he is going to continue financing house purchases. The lien (a written document) is normally recorded at the local courthouse in the public records section. This is now a recorded legal agreement and cannot be reversed until the full balance of the debt is cleared. What this means is that even though the mortgagee has possession of the mortgage, he is not the owner of the property nor does he have the title.

However, you do have legal rights to the property. The only way the mortagee can sell said property would be in the event that you stop making payments. Should that happen, the house would be sold off to repay the finance used to purchase it. This process has many names; in the United States, it is referred to as foreclosure.

One thing individuals house hunting should always do, and though obvious bears writing, is to shop around for the best financial institution to handle your mortgage. Considering all your options prior to signing on the dotted line, can save you shock and potential headaches in the years to come. Always take your time and read all your loan documents, yes even the fine print, to make sure you know your financial obligations upfront.

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Janet Giacoma provides home business direction and mortgage solutions to keep you on track and making money for years to come. Stop by The Abundant Alliance and say hello.