By Jerry Bayless

 Almost everyone has a yearning to own their own home but how to obtain that cherished dream is a major dilemma for most people. It is not always easy to get your foot firmly established on the first rung of the property ladder. Only a small minority would have saved the full asking price of their new home, but fortunately there are available options which exist to facilitate the purchase of a new house. Morgage loans can be obtained to enable people to purchase their home by monthly instalments.


In essence a mortgage loan is an amount of money secured against a property by a financial institution such as a building society or bank. This loan must be paid by the home owner in accordance with the conditions specified by the lending institution. Many components impact the conditions which can vary depending on the lending institutions. Some such factors consist of the amount borrowed, the sum you are able to put down as a deposit, the length of the loan, the interest rate, the method of repayment, even the country you live in, and of course the type of loan. In view of these many factors it is always wise for the borrower to fully understand the implications prior to signing up to any deal.

Since mortgage loans are secured by the home you are intending to purchase, failure to complete your morgage loan payments may result in you losing your home. No one wants to be in that position, but many proceed with a mortgage as it may be the only remaining way to buy a home. Think before you sign and that situation may never happen to you!

Mortgage loans, as with other loan types have interest rates factored in, and are set up to amortise over a pre-determined period, which is usually 15 or 30 years. Lenders provide loans in view of the interest which will build up over that period. Therefore, home owners should never forget about the interest as this is really why lenders are usually so keen to make available the facility to borrowers.

Fundamentally there are three main types of mortgage loans, although a wide range of others may be obtained. Amongst the most frequent are:

Interest mortgage loan - where the interest only is repaid at regular intervals for the period of the loan.

Fixed rate mortgage - the periodic payments and interest rate are fixed and are non-negotiable for the complete term of the loan.

Adjustable rate mortgage - this is where the interest rate may rise or fall depending on market conditions.

Potential borrowers are advised to gain as much information on mortgage types and interest rates as possible prior to signing up to any deal which you may not be able to sustain in the long term. Remember that failure to keep up with your payments will almost certainly lead to your property being repossessed. Do remember that increases in interest rates may mean a crippling and unsustainable burden on your finances.

Jerry Bayless is an experienced loan officer with a good deal of experience managing morgage loans. He has developed a website with the prime focus of educating first time home buyers as regards to the complexities of a Morgage.

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