Cheap Fixed Mortgages Explained...

There are many misconceptions about cheap fixed mortgages which I hope this article will finally "put to rest" and create a better understanding of what a mortgage actually is. Often referred to as a mortgage home loan, mortgages are not a loan in the traditional meaning of the word. In fact, the actual term mortgage, is not an actual loan at all, its a form of security. The terms mortgagee (the financier) and mortgagor (buyer), are part of a legal contract (mortgage) which uses the property as security on the debt. This legal document is a way to protect the lender from losses and expenses by having the very item (house) used as security against a default on your part.

The cheap fixed rate mortgage has made it possible for many people and companies to buy properties with only a small percentage of the purchase price as a deposit and very little initial down payments and expenses. Without the mortgage, it would be impossible for many average citizens to afford the home of their dreams. The way this process works is presented in brief detail during the rest of this article and by reading further, you'll have a better understanding of the term mortgage and some other real estate terminology. Being the financier, the mortgagee is the person who lends funds to the mortgagor or borrower. The property has a lien, which is the legal ownership of the property by the mortgagee until the agreement between the two parties has been fulfilled.

The Mortgage Document

This is the collateral or the security for the mortgagee who has provided the security instrument for your home loan. Information about the lien is registered at a local county courthouse, or similar, to ensure the contract is official and binding. The lien stays in strict force while the debt remains but the property is actually owned by the mortgagor. This can create a misconception or a strange situation where the mortgagor still actually owns the property even though the debt still remains to be paid.

Your Mortgage Rights

The only time the mortgagee has any rights over your property is only in the event that you default on payments and that is the only time he can sell it to recover the outstanding debt from you. A set time before any action can be taken is usually outlined and defined by the state laws that the mortgage was created in. "If and when" this happens, the procedure that follows is called a foreclosure, but even at this stage it is required to go through the courts first. One cannot just proceed to taking over your property without going through the proper legal channels. Following the legal channels is done in order for it to be considered a legal proceeding and not revert back to the "old" days of just taking over someone's property without merit and brute force. The proper and legal form of foreclosure is referred to as a judicial foreclosure.