Ben  Basra

Ben Basra

Sales Representative

RE/MAX Metropolis Realty Brokerage*

Email Me

Choosing The Right Mortgage - PART 1

Before we discuss selecting the right mortgage, we need to understand the main facets
of this topic, part one being what a mortgage is and part two, what are the benefits and
disadvantages between the various mortgage options you could possibly qualify for.


What Is A Mortgage?

A mortgage is a loan given to an individual by a lender and or financial institution in order
for a person to be able to finance a purchase, to be more specific in this example the individual
wishes to be approved of a mortgage to purchase a home. 

Think of a mortgage as a contract to borrow, within the scenario you have two players. First you
have the borrower who represents the interested party and is seeking an amount of money.
The money is the loan they wish to borrow because they do not have sufficient funds in order
to buy the home. The second player is the lender who has the advantage of having the ability
to afford the home and thus lends an amount to the borrower so that the borrower is able
to afford the purchase.


You now have a mortgage on the home you’ve purchased with outside financial resources. 


Mortgage Process - Once a Borrower Is Given a Loan

Lenders sound very kind; you can’t afford the home you desire and there’s people who are
willing to lend you the money for it so you can make the purchase. In a perfect world this
would be the end of the process but in reality, it’s the first part after being approved for a mortgage. 

If it sounded too good to be true that’s because it is, for those who are familiar with mortgages,
none of this would be considered new information but for those who are unfamiliar with this subject,
please don’t hesitate to reach out and ask me questions on this content or real estate in general,
I hope with my efforts you are able to understand mortgages and have been introduced to the
different kinds as well. 

Let’s get back to where we left off,  the borrower is given the loan and a mortgage has been put on
the property the borrower has purchased thanks to the lender's loan. 

By receiving the loan, the borrower is in contractual agreement with the lender that details, if the person
borrowing is unable to pay back the amount that has been borrowed within the certain time agreed,
the lender will be given full rights to the borrower’s assets.

The idea is that if the borrower is unable to repay the amount borrowed, in order to make up for the
money borrowed from the financial institution, the borrower’s assets would be overtaken or possessed
by the lender. 

Let’s say you have a mortgage on the home you once were not able to purchase until you had been given
a loan to afford the property. Time went by and unfortunately you are unable to pay back the amount that was
once borrowed from the bank. Upon seeking the mortgage, it was outlined that if the borrower was not able to
repay the amount borrowed then the borrower's mortgage would be used as collateral to the bank.

Meaning the amount, you borrowed once upon a time was only given to you because you had signed off on
the fact that if you are not able to repay the bank you have pledged that your home would no longer be yours. 

The mortgage was the security for giving the loan to the borrower in the first place, meaning the lender would
have the legal rights to do what they please with the property you had taken a mortgage on.

If you have any questions about real estate and or would like to discuss this topic in more detail, please do
not hesitate to message me - I would be happy to assist you!
➤ (416) 564-7829


Have Questions?

I agree to receive marketing and customer service calls and text messages from RE/MAX Metropolis Realty Brokerage*. Consent is not a condition of purchase. Msg/data rates may apply. Msg frequency varies. Reply STOP to unsubscribe. Privacy Policy & Terms of Service.