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Home Mortgages and Loans

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Home Mortgage Explained

It is basically the sum of money that you borrowed to buy your house and using this house as a guarantee or collateral.

A home mortgage document usually consists of two items; the promissory note and the mortgage as the other document. The promissory note (aka a payable note) is stating that one party will promise in writing to pay the  required amount of money (that’s you) to the other party (financial institution like a bank).

The bank will not give you a home loan until they make sure the property or house value is equal to the loan; that way the bank can secure its loan.

It is similar to a car loan situation, where the bank is securing its loan by taking the car back (repossessing) in case you can not make your payments any longer.  

 

 What is Promissory Note?