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Mortgage word originated from a French word “mort” which means “agreement until death”. Mortgage loan is a general term for the loan secured by a mortgage on real property. Mortgage refers to the legal security, but the terms are used interchangeably to refer to mortgage loans.
Mortgage loan refers to a loan secured by the residential property, often the purpose of acquiring the residence. Mortgage loans may be lower priced than other forms of borrowing because the value of the property reduces risk for the lender.
There are few benefits of mortgage loans, such as:
- There are many types of mortgage loans and are available to be used worldwide.
- The flexibility of rate of interest in mortgage loans. The rate of interest can be fixed for the life of the loan or can be changed at certain predefined period.
- There are various ways by which you can repay the mortgage loan. The repayment may depend on locality, tax laws, and prevailing culture.
- During the period of the loan, the entire monthly payment is tax deductible.
- The main alternative to capital and interest mortgage is an interest only mortgage, where the capital is not repaid throughout the term. This way you can benefit more from Mortgage loans.
- The interest rates are made with flexible options with fixed rate or ARM’s.
Features of the mortgage loan:
Mortgage offset: Links your mortgage with your transaction account so that every dollar in your transaction account offsets the interest calculated on your mortgage.
Refix: Allows you to enter into another fixed loan rate at the end of your current fixed rate period.
Redraw: Allows you to have access to any additional payments you have made above the normal scheduled repayments.
Parental Leave: Lets you to reduce your repayments by up to 50% for up to six months subject to the terms and conditions.
Credit facility: Rather than going to another banker for Home Improvement and Furnishings, a credit facility on your loan increases the credit limit on your existing loan.
Additional repayments: Making additional payments from your year end bonuses and save thousands of dollars and reduce the number of years off your loan.
Income to loan account: By depositing all your income into your loan account you can save in interest calculated on your mortgage and still access cash or pay bills by setting up automatic transfers into other transaction accounts.
Consolidation of accounts: A single account that merges your transaction may simplify your banking and save your interest on your loan while every dollar working for you.
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