I have been asking around what these two terms mean but its like they always pass-by my head every time someone defines them and since this is a forum for learning and gaining new ideas...kindly define/explain those two terms for me or any other person who might be wondering what they mean...will appreciate. Thank you.
Sure, I will try my very best to explain simply to you what they both are. Firstly, a mortgage is any "right" over a property, this right may be created by virtue of money being lent and "property" being used as a method of paying back for the money borrowed,should or if the property owner has trouble in paying back the money borrowed. So in other words, a mortgage is any interest over a property that stems from the issuing of money to any person. A foreclosure is an ending of any and all rights of a property owner on the default of paying the loan back, so in other words, If a person has a mortgage on a property, an fails to pay back to borrowed money, the person/ entity that has loaned the money, has the right to seize and sell the property to recover any outstanding amounts owed. A foreclosure ends the mortgage. Please let me know if this is clear enough, thanks a million.
Thanks in A million Investor ...verily understood...i bet if i was doing an exam in regard to those two terms i would pass with flying colors
Yep, mortgage is when the bank own your place for example, you need to pay them monthly. If you don't pay the foreclose it, they take the house away from you.
Hey Diane! I see you already got some answers but I'll add mine to it. A mortgage is what you have if you have not fully paid off your home. If you borrowed from a bank, they hold the mortgage until you have the house fully paid. There used to be "mortgage burning" parties here in the U.S. years ago when the last payment was made... meaning you finally own the house and the bank has no further claim to it. Foreclosure is what happens if you can't make your payments. The bank (or whomever you borrowed from) forecloses on your mortgage and they own the property with no further chance for you to get it back or own it.
Hi, I see that you have the understanding that you were seeking, but I guess I will chime in here also: Mortgage: a loan secured for the purchase of real estate. Foreclosure: the process used by the mortgage lender to gain ownership of the borrower's property when the borrower is unable to pay the loan back as agreed.
Foreclosure is simply when the folder of the mortgage (usually a bank) has placed leans upon the property and intends to sell the property to reclaim their investment. More then just a bank or mortgage holder can cause a foreclosure, in the United states you can get foreclosed on by your Homeowners Asssociation (if you are a condominium) for back monthly fees or assessments. Additionally foreclosure can happen if you have not paid your taxes or you claim certain types of bankruptcy. Foreclosures for some can be terrible, for others they can be an opportunity.
