What is ‘security’ when it comes to getting a mortgage?
If you're looking to purchase a home, you've likely heard the term "security" thrown around quite a bit, but what exactly does it mean?
Here in Aotearoa, the most common form of security for a mortgage is the property being financed. The property serves as collateral, assuring the lender that if you are unable to make your mortgage payments, they can take possession of the property and sell it to recover the money they loaned you.
Mortgage security is a win-win situation. You get the keys to your dream home, and the bank gets the assurance that they're in safe hands. They're not interested in taking your home away – it's more like a safety net just in case life throws a curveball.
Having a solid understanding of what security means when it comes to getting a mortgage is essential for making informed decisions throughout the home-buying process. A mortgage advisor can help guide you through the process and answer any questions you may have, so if you want to chat further - get in touch!