Maybe you decided to invest in a new business, maybe you want to finally open that new branch for the office or it could be a new tractor or machinery for the farm. Sometimes you come across situations in life when you need a large amount of money in a small amount of time. Well, what’s a person to do? Given the fact that there are no golden pots at the end of any rainbow, the next best thing to do would be to take a loan. And if you decide to do that, all you have to do is find yourself some lenders. Then you find out the ugly truth that nobody is willing to lend you a penny unless you’re willing to make some compensations. That’s where a mortgage comes in.
Titles Are Invaluable Assets
The title that you hold for any land and property of your own is a very valuable document. An owner can use this title document as security for a loan, while at the same time remaining at the premises or using it. In this way, you get the money you need for your investment and a lot of time to pay it back. This is what we call a mortgage.
If you need a mortgage, the first thing you (the borrower) needs to do is get the process started by submitting an application to the lender. The lender will consider your offer and weigh the risks involved before deciding whether to proceed with the mortgage. If the lender finds that both the borrower’s financial potential and the value of the real estate title involved are worth committing to, he will agree to the mortgage. The lender will now start the documenting process where the details of the loan amount and repayment terms are put in writing. If the borrower finds the conditions acceptable, they can move on to the next step. The mortgage is then signed by the borrower and lender, acknowledged before an authority, like a notary public and made into a legally binding contract.
During The Loan Period
After receiving the full amount from the Lender, you are now responsible for making periodical payments to the lender. This period can vary from 10 to even 30 years. The borrower is solely responsible for repayment of the loan, failing which measures will be taken by the lender to retrieve his money in what is called Foreclosure.
In the case of the borrower failing to make the necessary payments as per the contract, then the lender can foreclose on the mortgage. He has the option of selling the property and reimbursing the amount given by him to the owner of the title. But before the property is sold, the borrower has to be informed and given a final chance to make his repayments. The lender does not have the power to take anything from you by force.
And that is why it’s important to get the proper officials involved when making the agreement contract. There may be real estate agents involved or any suitable candidate who will make sure that both sides benefit and nobody has a disadvantage or complaint.