Many people used to call a home loan as a Mortgage. So let us see make a Comparison between mortgage and home loan
- Loan is the money which is lended by an individual, financial firm or the Bank to another individual or the small firm for a specific period and is due to be repaid with interest after a specific period. Home Loan is also a type of loan which is given to an individual who has to repay this amount with interest in a specific period. Most of the home loans are lended to an individual in the lieu of the guarantor, that individual provides to the bank. According to the international rules of banking the guarantor must be a person who is associated in some or the other way with the bank. Some banks even give the loan to a person based on the person’s (financial) reputation or the credit in the market.
- On other hand Mortgage is the security deposit which is taken from the borrower and which has the same face value as the loan which is paid to the borrower by the bank. Thus Mortgage is a type of legal document or a type of legal contract which protects the lender’s interests in the borrower’s property. For example tangible assets like the house or the car or the ornaments that posses the equivalent face-value as the amount of the loan are mortgaged. So even if the borrower fails to repay the loan after a specific period the lender could recover the loan amount selling the tangible assets of the borrower.
Thus we have seen the comparison between mortgage and home loan.
Now let us discuss about the types of Mortgage Companies which give loan to an individual as well as other firms.
Types of Mortgage Companies:
There are two types of Mortgage Companies mainly the Best Mortgage Companies and the Bad Credit Mortgage Companies.
- Best Mortgage Companies like Wells Fargo and Wachovia Mortgage companies are based in USA.
- Bad Credit Mortgage Companies like Synovus Financial and Golden West Financial Corporation which are also situated in the USA.
- Best Mortgage Companies are those Mortgage Companies which provide various types of loans and mortgages in the best possible way.
- Bad Credit Mortgage Companies are those companies which give a loan to the borrower with a bad credit score (given by the credit system) against assets of the same value at high rate of interest.
We know that the rate of interest is charged on every loan amount. Loan Calculator is used to calculate this interest.
Home Loan can be a small transaction which can consist of a less amount of money while Mortgage is an always a large transaction in which transaction amount is very high. This is the main point of comparison between mortgage and home loan.
Home Loan is a transaction in which a friend or a relative gives money to another friend or relative with or without interest. This is not the case of Mortgage. This isan importantcomparison between mortgage and home loan.
Thus it is better to consult the loan consultant and take an advice from him as to which firms offer loans at the reasonable rate of interest and extended period.
Look before you leap .Think twice and act wise before applying for a home loan by mortgaging your belongings. Search for other avenues and options after making comparison between mortgage and home loan.