Even if you are new to the housing market, maybe you're finally thinking of leaving renting behind for a home, you are probably aware that the purchase of your home will likely be the most expensive deal you ever make. In fact, houses today are so expensive that they are well beyond the means of most people - and particularly first time homebuyer - when it comes to affording them.
For this reason, most homeowners take out what is called a mortgage. Basically, a mortgage is a big loan from a bank or other lending institution that is used specifically to purchase a home, like a piece of country Milton, Ontario real estate away from the big city. The home is what is known as the security for the loan. Security means that should the person receiving the money for the loan fail to make payments on that loan, the lender gains title to the home. In effect, in this case, the owner loses the home.
Most jurisdictions within a country have the same basic ideas behind a mortgage in Canada. Ontario and Alberta, for example, will both operate under federal mortgage laws. However, different countries will have different laws governing mortgages; as you may see by the current recession in the United States, different laws can lead to drastically different incomes.
This last point is particularly important to understand when it comes to immigrants and their mortgage. Toronto, Ontario is an ethnically diverse city, for instance, and anybody moving there from outside of the country needs to be aware of the laws governing mortgages within Canada.
The idea of the mortgage loan is one that has taken hold all over the world. While the basic concept is the same whether you're buying a condo or a home, different terms will apply according to national laws. On top of that, most countries will have several different types of mortgages. However, for now, understanding that a mortgage is a loan for a house is the most important concept.