What is a Mortgage Loan?
A mortgage loan is a secured loan specifically used to purchase real estate. The property itself serves as collateral, which means that if the borrower fails to repay the loan, the lender can take possession of the property through foreclosure.
Types of Mortgages
- Fixed-Rate Mortgages: These loans have a constant interest rate and monthly payments that never change.
- Adjustable-Rate Mortgages (ARMs): These loans have interest rates that may change periodically based on market conditions.
Understanding the different types of mortgage loans can help borrowers make informed decisions when purchasing a home.
