What is a mortgage?

A mortgage is a loan taken out to purchase real estate—such as a house. Mortgages are secured by the real estate they are used to purchase. In Pennsylvania, mortgages are regulated by the Pennsylvania Mortgage Lender Act (Mortgage Act). The Mortgage Act requires lenders to be licensed and regulated by the Pennsylvania Department of Banking and Securities. The Mortgage Act also sets the standards for loan processing, origination, and servicing. In Pennsylvania, the main types of mortgages are conventional mortgages, FHA mortgages, VA mortgages, and USDA mortgages. Conventional mortgages are the most common and involve a government-sponsored entity such as Fannie Mae or Freddie Mac. FHA mortgages are federally insured and require lower down payments than conventional mortgages. VA mortgages are offered to qualified veterans, and USDA mortgages are for rural property purchases. The terms of a mortgage vary depending on the type of loan. Generally, a mortgage will involve monthly payments, an interest rate, and the length of the loan. Homeowners generally get a fixed-rate mortgage, which means the interest rate stays the same the entire length of the loan. Alternatively, homeowners may choose an adjustable-rate mortgage, where the interest rate changes over time. In addition to the mortgage itself, Pennsylvania homeowners will need to pay closing costs. This can include fees charged by the lender for processing the loan as well as other fees. Pennsylvania law also requires that certain documents are provided to borrowers before they sign on the mortgage. Overall, a mortgage is a loan taken out to purchase a house. Mortgages are regulated by the Mortgage Act in Pennsylvania, and there are several types of mortgages, including conventional, FHA, VA, and USDA mortgages. The terms of the mortgage vary, depending on the type of loan. Homeowners also need to pay closing costs.

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What is a mortgage?

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