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Historical origins of the mortgage

The mortgage in the U.S.

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The mortgage is a real right of a secured loan on a property (usually real estate) that remain in the hands of its owner, the creditor may, if the debt is not paid within the time agreed to promote the sale of the property taxed, regardless of their owner at the time for, with the amount, make payment of its claim.

A mortgage is a right that is constituted by contract, which must be registered with the Land Registry to have the face value to third-and serves to secure a debt or obligation and is therefore an accessory to another contract that is the principal. So, if it has a credit agreement between a bank and receiving an accredited mortgage guarantees to receiving payment of the auction by either the court, upon demand and sentence against the ground. Generally, the mortgaged property is often the subject of the claim property or separate property owned by or accredited by a third party who has agreed to provide the mortgage on his property.

A mortgage is defined using 3 parameters:

     * The capital, which is the amount of money borrowed by the bank. Borrowed capital is generally lower than the value of the mortgaged property, so that it can respond in the capital in the auction in the event of a default.
     * The term, which is the time to take the loan. The loan repayment is done through periodic payments (usually monthly) until requested to return the capital plus all interest accrued during the time that we have taken to return the loan.
     * The interest rate, which indicates an extra annual percentage to be paid annually under the bank profit from it.

The interest rate may also be:

     * Fixed: It keeps its value over the entire term of the loan.
     * Variable: Its value is reviewed periodically to adjust its value to the current state of the economy. Usually employs an economic index such as Euribor, Libor or the IRPH, which was added a differential so that the interest of the mortgage is always higher than the benchmark.

3 Once the above parameters it is possible to make calculations to know which are the profits of the bank for the loan and what the fee must be paid monthly until paid off (money back to the bank).