| What is a mortgage? |
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A mortgage is a loan that uses a
property as security to ensure that the debt is repaid. The
borrower is referred to as the mortgagor, the lender as the
mortgagee. The actual loan amount is referred to as the principal,
and the mortgagor is expected to repay that principal, along
with interest, over the repayment period (amortization) of the
mortgage. |
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Since a mortgage is a fully secured form of financing, the
interest you pay is usually less than with most other types
of financing. Many people use the equity in their homes to finance
the purchase of investments. Using a Secured Line of Credit,
or a fixed-rate mortgage, the interest costs are lower, and
they can even write off those interest costs against their taxable
incomes. |
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A mortgage can be used for financing many different things,
including:
- Purchasing or constructing a new home
- Purchasing an existing home
- Refinancing to consolidate debts
- Financing a renovation
- Financing the purchase of other investments
- Financing the purchase of investment property
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