First Mortgage

The term “mortgage” is bandied around constantly in the media, often with the assumption that the viewer or listener needs no accompanying explanation of its meaning. For those of us who are not financially minded, what exactly is the meaning of this term?

Firstly, we will look at exactly what it is that the language professionals have to say. To them, a mortgage is “a deed or conveyance of an interest in a property, held as security for the repayment of the borrowed money”. Huh? Well to be perfectly honest, that didn’t help one bit! Let me explain then. A mortgage is the term given to the sum of money which you are able to borrow when buying a house. If you dont have all the cash to pay for the house you are looking to buy, a bank will often give you the extra cash you need, so that you can complete the purchase. It is this “sum of money” that the bank lends you, which is referred to as a “mortgage”.

Interestingly, if you have a mortgage on your property, you dont actually own it! This may seem unusual and somewhat unfair, especially if you helped towards the cost of the house. But, as you will see in other articles, this benefits not only the bank, but also yourself.