Help me understand these terminologies: mortgage, loan, borrower, lender.
A loan is money paid to you (as a borrower) or paid to others on your behalf. You have the instant benefit of that money, because that cash is used for something of value to you (for example buying you a home to live in, or buying you an investment/ rental property, or a piece of other types of property, such as vacant land, or a manufactured home on land package deal, or the money is used to improve, rehabilitate your property, such as making repairs, adding garage, adding a recently popular ADU or acessory dwelling units at the backyard. On the otherside of the transaction, the lender of the money, which is the de facto investor that provides the money to you, also gains some benefit in terms of interest payment that they will receive according to a written contract. It is supposed to be made as a win win situation for both sides: borrowers and lenders.
The written contract is called the “note” or “promissory note”. Want to learn more about mortgage loan? Contact us for our free e-book.