People have a long history of securing loans from one another. The process has grown a bit more complex as society has advanced, but the general principles remain largely the same. A loan is simply a sum of money given to a borrower with the intentions of paying the loan back with interest. A loan works well for both parties involved because the borrower is able to buy what they want, while the lender receives more money than the initial loan thanks to interest. A loan of $1,000 with an interest rate of 5% means the borrower would eventually give the lender $1,050 in order to pay off the loan.
Loans are used to purchase expensive things like homes and cars. Financial institutions are the largest lenders, particularly when it comes to mortgage loans for a new home. A promissory note signed by the lender and borrow lays out the conditions of the loan, including interest rate and payment schedule. The lender is given lien – or ownership – over the property should the borrower fail to meet the stipulations of the loan.
Some of the most common loan include:
- Secured loan: loans which depend on assets for collateral
- Unsecured loan: loans which don’t require collateral but have higher interest rates
- Conventional loan: loans not insured by agencies like the Federal Housing Administration
- Open-ended loan: loans where you can continually borrow, like a credit card
Ace Mortgage Loan Corporation has a reputation for quality mortgage loan services for the people of South Florida. Call today for more information about securing a home loan in Broward or Palm Beach Counties.
Are you ready to lock down your ideal mortgage?
Ace Mortgage Loan Corporation provides quality mortgage services to the people of Broward and Palm Beach Counties. Call us today at (954) 777-4774 to get started!