Definition: Mortgage lending refers to the process by which a borrower acquires financial assistance from an investor or lender in exchange for the right to use some portion of their capital as collateral to secure a loan. This financing arrangement typically involves several steps, including: 1.

Initial Credit Assessment

: The first step is the initial credit assessment, where the lender evaluates the borrower's creditworthiness and assesses their ability to repay the loan. 2.

Loans Approval and Execution

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Loan Application

: In this phase, the borrower applies for a mortgage through online portals or traditional financial institutions. -

Loan Documents

: The lender typically issues an official document known as a "loan agreement" that outlines the terms of the loan, including interest rates, monthly payments, and any other charges. 3.

Closing and Execution

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Closing

: Once the loan is approved, it's executed by the borrower and the lender. This stage may include signing legal documents, preparing paperwork for title insurance, and ensuring all necessary documents are in place. -

Execution of Loan

: The mortgage typically starts with a payment plan that includes monthly or bi-monthly payments towards the principal balance until the loan is fully paid out. 4.

Termination

: - Upon the borrower's maturity date, the mortgage may be terminated by the lender to free up funds for repayment. The word "mortgage lending" is typically used when discussing financial assistance provided through a lender or investor who offers capital as security for the borrower's future payments. It is also known as "home loan" in some countries, where it refers to the process of obtaining financing from an individual or organization that may be able to help the borrower with their home purchase.

mortgage lending