Everyone has heard of the word ‘mortgage’. You may even know people who have a mortgage on their house. But what does it mean exactly? This article tries to make it clear to you as easily as possible what a mortgage entails and what you might need it for.
The Dale dictionary defines the word “mortgage” as follows: (1) real property right as collateral for the payment of a monetary debt; (2) sum of money, loan with real estate as property. In other words, a mortgage is a loan, with real estate (for example a house) as collateral.
With ‘collateral’ it is meant that if you are no longer able to meet the mortgage loan, for whatever reason, the mortgage borrower can claim the collateral. As long as you meet the conditions of the loan, in most cases you retain the right to use the property given as collateral.
Pay attention! There are different types of mortgages
The principle of a mortgage is therefore very simple. But you have to be careful when you give a mortgage to the bank in exchange for a loan in the form of money. After all, there are many types of mortgage loans.
There is an interest-only mortgage, but also an investment mortgage, a green mortgage, a life mortgage, and so on. So always check carefully what kind of loan you take out. After all, every type of mortgage has advantages, but also disadvantages. It is therefore important to realize what the consequences can be.
It is not easy to say which mortgage you need to take out on one, two, three. After all, your own personal circumstances play a fairly large role in this, but the tax aspects related to the loan are also important.
These aspects also determine what the correct mortgage is. If you are unsure whether you are making the right choice, it is always important to consult a consultant who will be honest. He or she will look for the best solution for you without thinking too much about filling his own bags.
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