Long-Term Financing Measures

1334 Words5 Pages
Financing Financing comes in different forms and is issued for various reasons. It also comes with different processes and requirements and is stated in different ways. Some financing is secured by company assets where some is unsecured and only backed by unpledged assets in the case of default. Long-term financing measures can range from 10 year to 30 year pay back periods. A mortgage is a form of security against a loan given in advance. The mortgage loan is a term loan secured by the mortgaged property. There are residential mortgages and commercial mortgages. Residential mortgages are housing loans and typically are taken over a 30 year period, but can be for shorter periods. Some homeowners take them out for a 15 year period to pay less in interest costs. Commercial mortgages are usually a period of less than 10 years. Mortgage loans include either fixed or variable interest rates. The fixed interest rates will typically reset every two to three years. The variable interest rates fluctuate at the interest rates fluctuate with the economy. Mortgage loans are usually amortized with monthly loan installments. If the amounts are above 80% of the loan-to-valuation-ratio, it will generally require mortgage insurance to be maintained for the life of the loan. If the homeowner does not maintain the mortgage insurance for the life of the loan, they could be considered in default of the loan, giving the mortgage company the right to demand the full balance owed at that
Open Document