Mortgage financing Tips It is quite rare for a buyer real estate to pay cash. In the majority of cases, he or she must obtain financing from an Atlanta title loan or some source to complete the purchase. Although financing can take a wide variety of forms, it is usually one or a combination of the following: (1) a loan from a third party lender (a bank) to the buyer; (2) the “taking over” by the buyer of the payments on an existing loan which the seller or some former owner obtained from a third party lender; and (3) financing provided by the seller himself, in the form of a deferral of receipt of some portion of the purchase price.
The obligation to repay the financing cases is generally represented by a promissory note (or sometimes by a bond or contract) requiring monthly or other regular installment payments. Since real estate is usually considered to be excellent security for a loan, most financing which is extended to enable the purchase of realty is also secured by that same realty, commonly by means of an instrument known as a mortgage or deed of trust. Thus a mortgage involves a transfer by a debtor-mortgagor to a creditor-mortgage of a real estate interest, to be held as security for the performance of an obligation, normally the payment of a debt evidenced by a promissory note. If the debtor defaults on the note, the mortgage can have the real estate sold and the process applied toward payment of the debt.
Of course, not all mortgages are related to sales or purchases of property; an owner may borrow money to start a new business or to send his or her children to college, and may give a mortgage to secure repayment of the loan. In American law, the characterization of a mortgage as “ purchase money” in nature has important consequences with respect to its priority as against competing liens, and some states with respect to the ability of the lender to obtain a “deficiency judgment” if the borrower defaults and the real estate does not bring enough to pay the debt. However, the details of doctrines are outside our present scope.
Today most mortgages are amortized or repaid over a substantial number of years. Until the 1930’s most mortgages, however, were of the “balloon-note” type. Typically these were short –term mortgages for three to five years, and borrows made only interests payments until the maturity date of the motorcycle title loans Atlanta.