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• A mortgage is a loan used to buy real estate. Under the terms of a mortgage, the real estate is used as collateral for the loan. Most residential mortgages are set for payment durations of 15, 20 or 30 years.

• Fast Facts

  1. July 17, 2008: 30 year fixed-rate averaged 6.26%MarketWatch: U.S. mortgage rates fall: Freddie Mac (July 17, 2008)
  2. July 17, 2008: 15 year fixed-rate averaged 5.78%MarketWatch: U.S. mortgage rates fall: Freddie Mac (July 17, 2008)
  3. U.S. mortgage lending rates had been rising since the subprime mortgage crisis
  4. The federal government has cut rates to help prevent the mortgage crisis from causing a broader economic recession

• Mortgage Components

  There are 5 general components that make a mortgage:

  Principle: The amount of money that has been borrowed and not repaid to the lender.

  Interest: The charge or rate of increase that is added to the principle. These rates change daily and are negotiable.

  Taxes: Property taxes can either be added to the principle of a mortgage or can be paid independently.

  Property and Life Insurance: Similar to taxes, property and life insurance can be included in your mortgage payment.

  Mortgage Insurance: Sometimes referred to as PMI or MIP this insurance protects the lender in the event of death, forclosure, or in the event that an unconventional mortgage is negotiated.

• Mortgage Crisis

  On Friday, July 11, 2008, the second largest bank failure in U.S. history took place as federal regulators took over the IndyMac Bank.CNNMoney.com: Bank Regulators close IndyMac (July 11, 2008) The bank closed its doors three hours early on Friday and re-opened on Monday under federal control and a new name. In addition, the Federal Reserve opened up more credit for two other failing lending institutions: Freddie Mac and Fannie Mae. Together, these organizations either funded or guaranteed over half of all mortgages in America.The New York Times: Making Sense of the Fannie and Freddie Stock Slide (July 11, 2008)

• Related Mahalo Pages

  How to Buy a House That is for Sale By Owner | How to Buy a House | How to Sell Your House | How to Find a Reliable Moving Service | High-Risk Mortgages | Housing Bubble | Buying a Home | Selling/Renting a Home | Countrywide Foreclosures | How to Become a Real Estate Agent | How to Stop Foreclosure | How to Plan for Retirement | How to Become a Repo Man | How to Get Out of Debt | How to Refinance a Mortgage to Prevent Foreclosure | How to Avoid Foreclosure on a Fannie Mae Mortgage | How to Modify Your Mortgage | How to Avoid Foreclosure | How to Avoid Foreclosure with a Mortgage Modification | How to Use a Secured Loan Calculator | How to Purchase Structured Settlements | How to Get a Cash Advance | How to Survive a Financial Collapse | How to Get a Free Credit Report | How to Read a Mortgage Calculator | How to Find Real Estate Values

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