A mortgage is an interest-bearing loan on a property. The definition of a mortgage simply explained is that you take out a new loan or pay off an old one and pledge your property as collateral. This means that your property belongs to your lender and if you default, the lender can sell your property to pay off the debt. Compared to the land charge, the difference is that the mortgage is always tied to the repayment of the loan and the land charge is not. On the Internet there are numerous calculators with which they can calculate the conditions for their mortgage and the amount of interest. The interest rates for a mortgage are usually between one and two percent. To understand how such a mortgage works in detail, it is useful that they deal with the law field of real estate law.
Mortgage at a glance
- Definition: interest-bearing loan on real estate
- Simply explained: property is pledged for a loan
- Difference to land charge: mortgage is linked to repayment of loan
- Interest rates: between 1-2%
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