A mortgage loan, also referred to as a mortgage, is used by purchasers of property to raise funds to buy real estate; by existing property owners to raise funds for any purpose while putting a lien on the property being mortgaged. The loan is "secured" on the borrower's property. This means that a legal mechanism is put in place which allows the lender to take possession and sell the secured property ("foreclosure" or "repossession") to pay off the loan in the event that the borrower defaults on the loan or otherwise fails to abide by its terms.

Mortgage borrowers can be individuals mortgaging their home or they can be businesses mortgaging commercial property (for example, their own business premises, residential property let to tenants or an investment portfolio). The lender will typically be a financial institution, such as a bank, credit union or building society, depending on the country concerned, and the loan arrangements can be made either directly or indirectly through intermediaries (brokers). Features of mortgage loans such as the size of the loan, maturity of the loan, interest rate, method of paying off the loan, and other characteristics can vary considerably. The lender's rights over the secured property take priority over the borrower's other creditors which means that if the borrower becomes bankrupt or insolvent, the other creditors will only be repaid the debts owed to them from a sale of the secured property if the mortgage lender is repaid in full first.

(c) source Wikipedia

Yes. The different kinds of mortgages are:

Repayment mortgages

A repayment mortgage means that you progressively pay off the amount you borrowed to buy your home. Initially, it’s just the interest that’s paid off as part of your monthly payments, with the full amount you borrowed being paid off gradually. This type of mortgage guarantees that all the money you borrowed is paid off by the end of the policy term.

Interest-only mortgages

With an interest-only mortgage, you only pay the accrued interest each month. This means that your monthly payments will be low, but you won’t be paying back the capital you borrowed to purchase your property. You’ll need to make further arrangements to pay back the capital in the form of stocks and shares or other personal investments and products.

Fixed-rate mortgages

A fixed-rate of interest is set for an initial period of time, normally 2 or 5 years. Your repayments will remain the same for this period, with the rates then changing to be in line with your mortgage provider’s current rates. At the end of the initial fixed-rate period, you may want to compare other rates to ensure you receive the best value deal.

Tracker mortgages

Interest rates are linked to the Bank of England base rates with tracker mortgages. This means that as the base rate changes over time, so will your monthly payments. If you wish to get a different mortgage before the end of the tracker term, you may be liable to an early repayment fee.

Standard variable rate mortgages (SVR)

This kind of mortgage refers to the lender’s typical rate of interest. The variable rates are set by the individual lenders, and can change over time depending on how the Bank of England’s base rate adjusts.

Discounted mortgages

This mortgage offers an interest rate below the lender’s standard variable rate (SVR). The discounted rate is usually available for two to five years, after which the rate payable will most likely be the SVR of your lender. You may be liable to an early repayment fee if you wish to switch mortgages.

Offset mortgages

These plans work by offsetting your personal savings against your mortgage. This helps to reduce the total interest you will need to pay. An offset mortgage often allows homeowners to pay off their mortgages quicker, but is generally reliant on the person having a substantial amount of savings.

This will largely depend on how long you wish to hold on to you property. If you plan to be in your home for more than seven years, you may want to consider a fixed-rate mortgage, which offers predictable payments and long-term protection against rising mortgage interest rates. If you plan to be in your home for seven years or less, an adjustable-rate mortgage (ARM or tracker mortgage) could be attractive. Keep in mind that as the Bank of England's base rate changes over time, so will your monthly payments.

Traditional loans usually require documents that verify your employment, income and assets and may include:

Personal Information (eg. ID, current address); Bank statements for the past two or three months; One to two years of tax returns; A signed contract of sale (if you've already chosen your new home); Information on current debt (including car loans, personal loans, student loans and credit cards debt).

For a comprehensive list of documents we would need from you in order to apply for a mortgage loan (residential, commercial, hard loan developer finance or buy-to-let loans) please visit our "required documents" section on this website.

There is no set amount. A common practise is to set the down payment between 20 - 25 %. However, you might be surprised to learn that many first-time homebuyer plans require as little as 5-10 % down payment. Today, there are many loan programs that can be tailored to fit your needs and financial resources.

But keep in mind, that with lower down payments your interest payments and therefore the overall cost for your mortgage will go up. You also need to consider, that down payments of less than 20% will most certainly increase your cost for private mortgage insurance.

Today most lenders ask for a 10% deposit or more, and many tend to save the best rates for borrowers with a deposit of around 25%. As a rule of thumb, the more you can advance for a down payment, the lower the overall cost of the mortgage will be.

The loan-to-value (LTV) ratio is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased. The term is commonly used by banks and building societies to represent the ratio of the first mortgage lien as a percentage of the total appraised value of real property. For instance, if someone borrows $130,000 to purchase a house worth $150,000, the LTV ratio is $130,000 to $150,000 or $130,000/$150,000, or 87%. The remaining 13% represent the lender's haircut, adding up to 100% and being covered from the borrower's equity. The higher the LTV ratio, the riskier the loan is for a lender.

The valuation of a property is typically determined by an appraiser, but a better measure is an arms-length transaction between a willing buyer and a willing seller. Typically, banks will utilize the lesser of the appraised value and purchase price if the purchase is "recent" with in 1–2 years.

In the UK, mortgages with an LTV of up to 125% were quite common in the run-up to the national / global economic problems, but today there are very few mortgages available with an LTV of over 90% - and 75% LTV mortgages being the most common today.

(c) source Wikipedia

MMR stands for Mortgage Market Review, which came into effect in April 2014 and changed the way lenders look at your ability to repay a mortgage.

As a result, many lenders now ask to see your bank statements and might ask you questions about your spending habits, in order to ensure you don't over-commit yourself financially.

The MMR set out the case for reforming the mortgage market to ensure it is sustainable and works better for consumers.

It had become clear by the height of the market in 2007, that, while the mortgage market had worked well for many people, it had been a cause of severe hardship for others. The regulatory framework in place at the time had proved to be ineffective in constraining particularly high-risk lending and borrowing. The MMR package of reforms is aimed at ensuring the continued access to mortgages for the great majority of customers who can afford it, while preventing a return to the poor practices that we saw in the past.

Read more on the subject here!

Your property may be repossessed if you do not keep up payments on your mortgages. If your financial situation has worsened, speak to your lender as soon as possible. Your lender will be able to discuss the options available, such as a short repayment holiday or a new repayment plan that could help you get back on your feet.

Get free, independent advice,  It's free to talk to any of these organisations:

The Money Advice Service

 Call 0300 500 5000 or visit the Money Advice Service site

Citizen's Advice Bureau

 Call 0345 404 0506 or visit the Citizen's Advice Bureau site

The National Debtline

 Call 0808 808 4000 or visit The National Debtline site

The StepChange Debt Charity

 Call 0800 138 1111 (free from all mobiles) or visit the StepChange site