What does mortgage mean?

Mortgage is simply understood as loan installment, which mainly means installment repayment and borrowing. Later, the word "mortgage" was interpreted by commercial banks as a home purchase mortgage loan, which means that the home buyer uses the property rights of the purchased house as collateral, and the bank pays the house price in advance to the house seller.

I believe that most people who have ever bought a house know the concept of mortgage, but for young people who have never been exposed to this, it is indeed an "unknown word", so let me tell you about it below. What do you mean by mortgage. Details 01

Mortgage simply means loan installment. The word mortgage was first popular in the Chinese community in Hong Kong, and its main meaning is installment repayment and borrowing. Later, the word "mortgage" was interpreted by commercial banks as a home purchase mortgage loan, which means that the home buyer uses the property rights of the purchased house as collateral, and the bank pays the house price in advance to the house seller. Home buyers need to pay principal and interest to the bank in monthly installments. The percentage of bank mortgages usually ranges from 50% to 80%, and the term ranges from 1 to 30 years. 02

Types of bank mortgage loans

1. According to the repayment method

1. Equal-amount mortgage loan: The loan amount divided by the loan term equals the principal , interest decreases as the principal decreases. This method is more practical if there are two extra funds that can be repaid or ended early.

2. Equal-amount principal and interest mortgage loan: The principal remains unchanged but the interest is amortized to each month along with the length of the loan term. If the interest rate remains unchanged, the monthly repayment during the loan period will be The amount remains unchanged.

2. According to loan projects

Housing mortgage loans, car mortgage loans, etc. 03

Specific procedures for home buyers to apply for real estate mortgages

(1) Choosing real estate If buyers want to obtain real estate mortgage services, they should focus on understanding this aspect when choosing real estate. When home buyers learn from advertisements or introductions from salespeople that mortgage loans are available for some projects, they should further confirm whether the properties developed and constructed by the developers are supported by banks to ensure the smooth acquisition of mortgage loans.

(2) When applying for a mortgage loan, after confirming that the property of their choice is supported by a bank mortgage, the home buyer should learn from the bank or the bank's designated law firm about the bank's regulations on the mortgage loan support for home buyers. Prepare relevant legal documents and fill out the "Mortgage Loan Application".

(3) After signing the house purchase contract, the bank receives the legal documents related to the mortgage application submitted by the house buyer. After reviewing and confirming that the house buyer meets the conditions for the mortgage loan, it will issue a loan consent notice or a mortgage loan commitment letter to the house buyer. . Home buyers can sign a "Commercial Housing Pre-sale and Sales Contract" with the developer or its agent.

(4) Signing a real estate mortgage contract. After signing a house purchase contract and obtaining proof of payment of the house payment, the buyer shall sign a "Building Mortgage Loan Contract" with the developer and the bank with the relevant legal documents prescribed by the bank. Clarify the mortgage loan amount, term, interest rate, repayment method and other rights and obligations.

(5) Mortgage registration, insurance house buyers, developers and banks should go to the real estate management department to handle mortgage registration and filing procedures with the "Building Mortgage Loan Contract" and the house purchase contract. For off-plan properties, mortgage changes should be registered after completion. Under normal circumstances, because the mortgage loan period is relatively long, banks require home buyers to apply for life and property insurance in order to prevent loan risks. When a home buyer purchases insurance, the bank should be listed as the first beneficiary. The insurance must not be interrupted during the loan performance period, and the insurance amount must not be less than the total value of the mortgage. The insurance policy is handed over to the bank until the loan principal and interest are repaid.

(6) Open a special repayment account. After signing the "Building Mortgage Loan Contract", the home buyer will open a special repayment account at a financial institution designated by the bank and sign a letter of authorization in accordance with the contract. , authorizes the institution to pay the bank's loan principal, interest and arrears related to the mortgage loan contract from the account. The bank confirms that the home buyer meets the mortgage loan conditions and fulfills the obligations stipulated in the "Building Mortgage Loan Contract".

After completing the relevant procedures, the loan will be transferred to the developer's bank supervision account at the bank at one time as the purchase price of the home buyer. 04

Background

Due to the large value of houses, it is difficult for home buyers to raise enough money to purchase a house at one time, even in countries or regions with high per capita income. If all home buyers have to wait until the purchase money is fully paid before buying a house, it will take at least more than ten years and at most decades. During this long waiting time, they will also have to pay the expenses incurred by renting the house. In recent years, due to the participation of financial institutions, banks have issued loans to home buyers, allowing home buyers to obtain housing in advance. For real estate development companies, banks issue loans to home buyers. Allowing home buyers to purchase a house in advance will help real estate development companies gather capital turnover to obtain more profits. For banks, if they directly grant loans to real estate development companies, all the houses built by the development companies using the loans cannot be sold quickly, which will inevitably affect the development company's ability to repay the loans. If a loan is directly provided to a home buyer, the home buyer will use all the loan proceeds to purchase a house. Since the loan amount given to the home buyer is lower than the house price, the home buyer himself will have to invest a sum of money to purchase the house, and because the home buyer is in When obtaining a loan, the purchased house is used as collateral, so the reliability of loan repayment is fully guaranteed. This kind of mortgage loan is beneficial to home buyers, real estate development companies and banks, and promotes the prosperity of the real estate market. Therefore, it has become more popular in recent years. Some real estate development companies have begun to refer to this type of mortgage loan as "mortgage." Some home sales advertisements indicate "providing ×10% mortgage", which is the loan ratio that banks can provide to home buyers. For example, "60%" means that they can provide Loan for house price 60. For the sake of loan security, banks generally can only provide loans with a maximum housing price of 70%. Mortgage is not exactly the same as mortgage loan. A more appropriate explanation of mortgage is a home purchase mortgage loan provided to home buyers. The purpose of the loan is to purchase a house (mainly a residence). Not all loans using houses as collateral can be used. Called a mortgage.