What is a mortgage?

A mortgage is a type of secured loan that allows an individual or business to use real estate as collateral or security for a loan. In North Carolina, a mortgage is a legal agreement between a lender and borrower that gives the lender the right to take possession of the property used as collateral if the borrower fails to make their payments. The two main types of mortgages in North Carolina are fixed rate mortgages and adjustable rate mortgages. A fixed rate mortgage allows the borrower to make the same payment throughout the life of the loan. On the other hand, an adjustable rate mortgage has periodic adjustments throughout its life where the interest rate may go up or down. The borrower is responsible for repaying the mortgage loan with interest over a predetermined period of time. The mortgage loan agreement will specify various terms such as the loan amount, length of the loan, interest rate, payment schedule, and any future adjustments to the loan. Most mortgages will also have a late payment or foreclosure clause. This clause specifies what the lender can do in the event of a late payment or default on the loan. This may include the lender being allowed to foreclose on the property in lieu of payment. In North Carolina, a mortgage is a legally binding agreement between a lender and borrower. It allows for the use of real estate as collateral in the event of default and provides borrowers with the ability to finance the purchase of a home.

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