A Mortgage consists of receiving money from the bank and this in exchange for the debt while it is being canceled corresponds to a guarantee in the form of material good: a house, a car, a land or some property that exceeds or equals the amount of the debt. The indebted person is given a term to pay, if he does not comply with the regulations, the bank takes final possession of the guarantee.
The Mortgage is a type of debt, only that it differs from natural debts since it has the guarantee, the exception for the entity that makes the loan (bank) that the loan is secure and that if the indebted person fails, the good that mortgage will serve as payment of the debt. When the bank takes possession of the property or property the offer, sells it or assigns it as a credit method to someone else in order to cover what could not be canceled.
The same banks when assigning credits for the acquisition of property such as real estate or automobiles, mortgage them, and assign terms and fees to cancel them, in this way of course this represents a considerable profit for the bank, but a greater comfort for the one who decides to invest in this type of credit modality to get their own things. Once all the principal and interest have been paid, the mortgage is without effect.
A mortgage is made up of 3 fundamental elements, the capital, that is, the amount of money that the bank or entity lent to the person who requested it, the time stipulated and set by the bank or entity to cancel the credit and interest, This represents the direct profit of the bank, these interests can be variable or constant depending on the fixed rate and the reason for the credit.
