What Is a Home Loan?
The public tends to use some financial terms interchangeably such as home loan and mortgage. Both denote debt products that finance real estate transactions. Let’s focus on the definition of home loan.
When a debt product has the phrase loan attached to it, it denotes a specific financial instrument. Loans differ from lines of credit such as home equity and credit cards. They have different terms and interest rates. Plus, lenders and issuers of debt put parameters on each product. For example, personal loans can fund emergencies, vacations, and consolidating debt. In a pinch, homebuyers can request a personal loan to fund the deposit on a home purchase. The maximum is $100,000.
On the other hand, home loans must fund real estate transactions such as building a new residential property or investing in one. Mortgages finance owner-occupier purchases. Home loans finance owner-builder projects and investor purchases. Most investors do not intend to live in the homes that they purchase. Therefore, they do not qualify for a mortgage. Since they aim to invest in residential properties, lenders will issue them home loans.
Mortgage House finances an array of residential property purchases for owner-occupiers, owner-builders, and investors. It helps to understand the nuance of the terms since it develops solid personal finance habits. All loan recipients benefit from reading the fine print contained in their contracts.
You can also use our online mortgage calculator with no strings attached.
Home Loan Conclusion
Homebuyers who want to apply for a Mortgage House home loan can start the process online. Those who require guidance and help can contact our loan specialists today.