Definitions of Mortgage

  • A mortgage can be placed on any property whether it is being purchased or already owned by the borrower. Mortgage payments are fixed by law for a period of time. They include a portion of the principal balance and a pro-rated amount of interest. The prorated interest amount is usually one twelfth of the annual interest rate. mortgage payments are always due in arrears, meaning that you are paying interest due for the previous month. What's interesting is that lenders can only apply the principal portion of the payment at the end of the payment cycle (once per month).If you pay your mortgage on the first of the month when it's due you are paying last months' interest due and giving the bank a thirty day interest free loan for the principal amount due which they apply at the end of the month. That is why they give you usually a fifteen day grace period to make the payment without charging you a late fee. The word mortgage is derived from two other words "mort"=death "gage"=grip. When you have a mortgage the lender has you in a death grip.
  • A mortgage is a loan to purchase a property. A mortgage loan uses the property as collateral to guarantee repayment of the loan. The borrower gives the lender a lien against the property, and the lender can foreclose on the property if the borrower does not repay the loan per the agreed terms.

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Alternate Spellings of Mortgage

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