What is a mortgage loan?

A mortgage loan is a type of loan taken out with the intention of purchasing a piece of real estate. In Virginia, mortgage loans are secured loans, meaning that the bank or other lender will take legal ownership of the piece of real estate if the borrower defaults on the loan. This allows the lender to cover their losses in the event of non-payment. Mortgage loans usually require a down payment prior to loan approval. This down payment is typically a percentage of the purchase price of the house. Additionally, the lender traditionally requires the borrower to pay closing costs. Repayment of the loan is typically done in monthly installments, which consist of repayment of the debt and interest. The interest rate on the loan will typically adjust according to the market. The borrower may also be required to maintain an escrow account in order to pay property taxes. The term of a mortgage loan will usually vary from 10 to 30 years depending on the amount borrowed and the borrower’s creditworthiness. In Virginia, mortgage loans must be recorded at the local county courthouse to become effective. This involves a fee, which is typically covered by the borrower. Once recorded, the loan becomes a lien on the property, meaning that the lender has the right to take possession of the property if the borrower fails to pay the loan.

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What is a mortgage loan?

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