Difference between revisions of "Mortgage"
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A '''mortgage''' is the granting of a [[lien]] on real property, such as a home, by a [[debtor]] (borrower) to the [[creditor]] (lender), such that the property is security for the repayment of a [[loan]]. Once the loan is paid, the mortgage should be discharged. | A '''mortgage''' is the granting of a [[lien]] on real property, such as a home, by a [[debtor]] (borrower) to the [[creditor]] (lender), such that the property is security for the repayment of a [[loan]]. Once the loan is paid, the mortgage should be discharged. | ||
| − | An increase in the mortgage rate makes it more difficult to purchase a home, and can cause a slowdown in the housing market. Mortgage rates | + | An increase in the mortgage rate makes it more difficult to purchase a home, and can cause a slowdown in the housing market. Mortgage rates can be 3 or so percentage points higher than the [[Federal funds rate]], which is set by the [[Federal Reserve Bank]]'s Federal Open Market Committee (FOMC). |
Hypothecation refers to the right of a creditor to liquidate goods, securities, or other [[assets]] if the borrower fails to service a loan. | Hypothecation refers to the right of a creditor to liquidate goods, securities, or other [[assets]] if the borrower fails to service a loan. | ||
Latest revision as of 21:13, October 7, 2026
A mortgage is the granting of a lien on real property, such as a home, by a debtor (borrower) to the creditor (lender), such that the property is security for the repayment of a loan. Once the loan is paid, the mortgage should be discharged.
An increase in the mortgage rate makes it more difficult to purchase a home, and can cause a slowdown in the housing market. Mortgage rates can be 3 or so percentage points higher than the Federal funds rate, which is set by the Federal Reserve Bank's Federal Open Market Committee (FOMC).
Hypothecation refers to the right of a creditor to liquidate goods, securities, or other assets if the borrower fails to service a loan.
A sub-prime mortgage is one in which the borrower has a demonstrated inability to abide by the terms of a credit obligation.
See also
- Financial Crisis of 2008
- Recession of 2008
- Glossary of Budget Terms
- Accounting
- Mortgage insurance
- Free Enterprise