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Mortgages

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by

Eliana Ferrer

on 30 June 2014

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Transcript of Mortgages

AKA "liens against property" or "claims on property" =
Hipoteca/crédito hipotecario/préstamo hipotecario
A

debt instrument
, secured by the
collateral of specified real estate property
, that the borrower is obliged to pay back with a predetermined set of payments.
Let's get down to work!
Components
Down payment
(pago inicial)
Collateral
(bienes afectados a la garantía)
/security
(garantía)
Principal
(capital)
Interest
(interés)
Payment frequency
(frecuencia de pago)
Term of agreement
(plazo del contrato)
Amortization period
(período de amortización)
Types
Conventional mortgage
(hipoteca convencional) → a loan for no more than 80% of the purchase price of the property.

High-ratio mortgage
(hipoteca con alto nivel de endeudamiento)→ the borrower places a down payment of less than 20% of the purchase price on a home.

Balloon mortgage
(préstamo con amortización del capital al vencimiento)→ the borrower repays only the interest on the loan for the term of the loan, and then repays the principal at the end of the period of time.
Fixed-rate mortgage
(crédito hipotecario a tasa fija)→ the borrower pays the same interest rate for the life of the loan.

Variable-rate mortgage / adjustable-rate mortgage
(crédito hipotecario a tasa variable)→ the interest rate fluctuates with market interest rates.
Find the equivalents for these terms:
Garantía
Deudor hipotecario/prestatario (US)
Acreedor hipotecario/prestamista (US)
Capital
Ejecución hipotecaria
Antecedentes crediticios
Otorgar un préstamo



Mortgages
Thank you!

Over a period of many years, the borrower repays the loan, plus
interest
, until he/she eventually owns the property free and clear.

If the borrower stops paying the mortgage, the bank can
foreclose
.
What is a mortgage?
Parties
Mortgagee (lender/creditor):
acreedor hipotecario (prestamista)

Mortgagor (borrower/debtor):
deudor hipotecario (prestatario)
Mortgages are used by individuals and businesses to make large real estate purchases without paying the entire value of the purchase
up front
.
a) Identify the parties to the mortgage in this video.

b) Which type of mortgage would you choose if you would like to lock in your monthly payments?

c) What will the bank do once it has checked that Patrick is creditworthy?

d) How does the mortgage lender protect itself from Patrick’s default?

e) What happens when a borrower’s payments are past due?
Watch the video and answer these questions:
Full transcript