Many homeowners think that a mortgage and a loan are interchangeable terms. However, they are both much more complicated than that. If you’re considering purchasing a home, it is important to familiarize yourself with the basics surrounding these terms. Before you approach a lender or a real estate attorney in Ashburn, VA, you’ll want to ensure you understand everything they might speak to you about.
Similarities & Differences Between Mortgages & Loans
A mortgage is similar to a long-term loan in that a lender assists with the financial side of home buying. However, unlike a loan, it transfers an interest in a property as a guarantee of repayment. This safeguard is a legally binding agreement so that the lender has access to some form of compensation if the borrower does not pay off the loan.
There are many types of lenders to consider as well, such as brokers, direct and secondary market lenders, and mortgage bankers. Learning more about these lenders and how they differ allows you to make a more informed decision. Working with a real estate attorney gives you access to the resources you need to understand the complexities and basics of mortgages and loans.