Mortgages and Tax Liens
Despite increasing numbers of the population having a mortgage, it is amazing how few people actually know what they are and how they work. The worst thing to call one is a mortgage home loan and while this expression is in common usage, it is totally incorrect. A mortgage is a secured debt using the property that is being purchased as the security for the debt until it is fully repaid. This is in fact the document which ensures the financing of the property is safeguarded until the end of the term, usually twenty five years.
Mortgages have in fact changed the face of house buying through tax liens because they provide the facility for the purchase without the buyer paying the full cost upfront. Although this article is brief, below are points that will help more in the understanding of how this system operates. Unfortunately it is our own common use of word like Borrower and Lender that has mislead people into thinking a mortgage is a loan when they should be referred to as Mortgagor and Mortgagee respectively. The security the mortgagee uses is called a lien which is a legal term that stays in force until all monies are repaid.