Monday, September 1, 2008

Scranton Mortgages | Mortgage Brokers in Scranton

The word "mortgage" literally means "dead hand". Figuratively, it means a pledge unto death. Old-fashioned mortgages were never paid off. They didn't amortize, or liquidate the debt itself. Instead, they gave the right to build and use the property for life, with the understanding that the ownership of the property remained with one who originally owned it.

Old English property laws were intended to protect the holdings of the elite. Mortgages were a way to "monetize" their land without surrendering control of it. Nowadays, the idea that someone could "mortgage" land without eventually surrendering it to the one paying the mortgage is unthinkable.

There are still forms of this archaic method of long-term leasing:
  • Ground rent
  • 99 year leases of property
There is also a type of non-amortizing loan called a "balloon loan" or interest-only loan. Typically, the loan payments are as if one had a 25 or 30 year amortizing loan, but no payments are credited to paying off the principal. Instead, in only 5 to 7 years, the principal becomes due and payable as a lump sum.

Today's mortgage market has seen a troublesome use of so-called ARM (Adjustable Rate Mortgage) loans. While these loans are not in and of themselves bad, giving them to those who will not be able to make the payments when the loan "adjusts" upward has created a crisis in the Real Estate market and the world economy as a whole!

Rather than dissect this problem here, consider well which type of loan you choose for your own home purchase or Real Estate investment property. It is up to you to do your own due diligence when it comes to borrowing a substantial amount of money. It is imperative that you do so when that money represents your life savings and your future net worth.

In Scranton, there are plenty of mortgage brokers to choose from. The key is to find one that will take into account your total financial plan and fiscal "fitness". Do your research and find the Mortgage Brokers in Scranton that will best serve your needs and select the best of the best.