A mortgage loan, also referred to as a mortgage, is used by purchasers of real property to raise funds to buy

real estate; by existing property owners to raise funds for any purpose while putting a lien on the property being
mortgaged. The loan is "secured" on the borrower's property. This means that a legal mechanism is put in
place which allows the lender to take possession and sell the secured property ("foreclosure" or
"repossession") to pay off the loan in the event that the borrower defaults on the loan or otherwise fails to abide
by its terms. The word mortgage is derived from a "Law French" term used by English lawyers in the Middle
Agesmeaning "death pledge", and refers to the pledge ending (dying) when either the obligation is fulfilled or
the property is taken through foreclosure. [1] Mortgage can also be described as "a borrower giving consideration
in the form of a collateral for a benefit (loan).
Mortgage borrowers can be individuals mortgaging their home or they can be businesses mortgaging
commercial property (for example, their own business premises, residential property let to tenants or
an investment portfolio). The lender will typically be a financial institution, such as a bank, credit
union or building society, depending on the country concerned, and the loan arrangements can be made either
directly or indirectly through intermediaries. Features of mortgage loans such as the size of the loan, maturity of
the loan, interest rate, method of paying off the loan, and other characteristics can vary considerably. The
lender's rights over the secured property take priority over the borrower's other creditors which means that if
the borrower becomes bankrupt or insolvent, the other creditors will only be repaid the debts owed to them
from a sale of the secured property if the mortgage lender is repaid in full first.
In many jurisdictions, though not all (Bali, Indonesia being one exception[2]), it is normal for home purchases to
be funded by a mortgage loan. Few individuals have enough savings or liquid funds to enable them to
purchase property outright. In countries where the demand for home ownership is highest, strong domestic
markets for mortgages have developed.

Definition of 'Home Loan'

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A sum of money borrowed from a financial institution or bank to purchase a house. Home loans consist of an
adjustable or fixed interest rate and payment terms.
A sum of money borrowed from a financial institution or bank to purchase a house. Home loans consist of an
adjustable or fixed interest rate and payment terms.
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Personal Finance

3.

Real Estate

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Mortgages

5.

What Is the Meaning of Home Loan?

What Is the Meaning of Home Loan?

By Ciele Edwards
eHow Contributor

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American Dream image by ne_fall_photos from Fotolia.com

A home loan, or mortgage, is a secured loan that borrowers obtain in order to
purchase a home. Because a home is the largest purchase many individuals will
ever make, most borrowers utilize home loans to assist with their home purchase.

Facts

Borrowers must apply for a home loan with a lender such as a bank or credit
union. Lenders require borrowers to provide proof of income to demonstrate that
their income level allows them to comfortably afford the loan. Borrowers must also
allow the lender to evaluate their credit history. This lets the lender determine how
likely the individual is to make his mortgage payments in a timely manner.

Significance

Mortgage loans carry an interest rate. This interest rate may be fixed and
unchanging or variable and subject to change, depending on the type of loan

program the borrower selects. The lower the interest rate, the less the individual
pays over time for the privilege of the home loan.

Considerations

Should a borrower stop making payments on his home loan, the lender may
claim the property through a process known as foreclosure. Because mortgage
loans are secured loans, the property itself is the lenders collateral. Lenders may
legally seize collateral in the event a borrower ceases to meet the payment
obligations she agreed to when she originally accepted the home loan.

commercial loan

Definition
Loan advanced to a business instead of to a consumer. Commercial loans are usually for a shortterm (from 30 days to one year), secured (backed by a collateral) or unsecured, and are often
advanced for financing equipment, machinery, or inventory. Banks usually require the
commercial borrowers to submit monthly and annualfinancial statements, and
to maintain insurance cover on the financed item.

Read more: http://www.businessdictionary.com/definition/commercial-loan.html#ixzz45gOBk48h