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Mortgage
A mortgage is a method of using property (real
or personal) as security for the payment of a debt.
The term mortgage (from Law French, lit. death
vow) refers to the legal device used in securing the property, but
it is also commonly used to refer to the debt secured by the
mortgage, the mortgage loan.
In most jurisdictions mortgages are strongly associated with loans secured on real
estate rather than other property (such as ships) and in some
cases only land may be mortgaged. Arranging a mortgage is seen as
the standard method by which individuals and businesses can
purchase residential and commercial real estate without the need
to pay the full value immediately. See mortgage loan for
residential mortgage lending, and commercial mortgage for lending
against commercial property.
In many countries it is normal for home purchases to be funded by a mortgage. In countries
where the demand for home ownership is highest, strong domestic
markets have developed, notably in Spain, the United Kingdom and
the United States.
Participants and variant terminology, Creditor, Debtor, Other participants and terminologies
Legal Aspects, Mortgage by demise, Mortgage by legal charge
History, Foreclosure and non-recourse lending
Mortgages in the United States, Types of Mortgage Instruments, The mortgage, The deed of trust
Refinancing
Advantages:
Refinancing may be undertaken to reduce interest costs (by
refinancing at a lower rate), to pay off other debts, to reduce
one's periodic payment obligations (sometimes by taking a
longer-term loan), to reduce risk (such as by refinancing from a
variable-rate to a fixed-rate loan), and/or to liquidate some or
all of the equity that has accumulated in real property during the
tenure of ownership.
Risks:
Certain types of loans contain penalty clauses triggered by an
early payment of the loan, either in its entirety or a specified
portion. In addition, there are also closing and transaction fees
typically associated with refinancing a loan or mortgage.
Points:
Refinancing lenders often require an upfront payment of a certain
percentage of the total loan amount as part of the process of
refinancing debt.
Types:
No-Closing Cost refinances and Cash-Out Refinance
 Effective
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