Guaranteed Personal Loans (Personal Loans and Unsecured Personal Loans and Personal Loans Debt Consolidation Book 1) by Martin Sterling

Author:Martin Sterling [Sterling, Martin]
Language: eng
Format: epub
Published: 2014-12-21T08:00:00+00:00

Mortgages are also commonly used in housing loans. For instance, Jill and her husband, Don, decide to obtain $320,000 from the bank after getting married in order to buy a house and lot in which to start a family. They enter into a housing loan contract, where the bank buys the house and lot for the young couple, on the condition that Jill and Don repay the $320,000, with 4.84% annual interest, within thirty years. If Jill and Don consistently fail to pay any of the installments for several times—this is what you call default—the bank may be forced to foreclose the house and lot, representing the amount that Jill and Don still owes to the bank. An auction sale or public bidding is usually held and the house and lot would be sold to the bank at a low price, say $320,000 despite the appreciation in value. The bank, in turn, can sell Jill and Don’s former sanctuary for a higher or inflated price to another interested buyer, or even at a price that truly reflcets the house and lot’s market value, taking into account the appreciation in value of the real estate. This is one way by which the bank recoups its “losses” from Jill and Don’s default.

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