Mortgages, also known as “liens against property” or “claims on property”, are debt instruments. They are secured by the collateral of specified real estate property that the borrower is obliged to pay back with a predetermined set of payments. Individuals and businesses use mortgages to make large real estate purchases without paying the entire value of the purchase up front. Over the years, the borrower repays the loan with added interest until he or she fully owns the property.
In this article, we will talk about 2 main types of mortgages: fixed rate and adjustable rate.