What Is the Difference Between a Housing Loan and a Mortgage Loan?
A housing loan provides an amount of money to a borrower and is used to purchase a home. After this purchase, the borrower will have to repay the housing loan over time. A housing loan is therefore any type of loan taken out in order to complete the purchase of a house. Most people will have to apply for a housing loan at some point during their lifetime if they plan to own their own home.
A mortgage loan is a specific type of housing loan, and is secured by the house the loan is used to purchase. A mortgage loan allows for lower rates for borrowers and reduced risk for lenders. However, if the borrower fails to make required payments on the loan, the house is forfeit and will be repossessed by the lender. This is not the case for other types of housing loans.
Sellers also gain some relief from mortgage loans, as they help to guarantee that the sale of their home will be completed by a potential buyer.
As a borrower, consider the benefits in lower costs and payments provided by a mortgage over other types of loan, but be sure to recognize that a mortgage puts your newly-purchased home at risk if you fail to repay the loan.
- What Is a Mortgage?
- What Type of Loan Should I Get for My Home?
- What Are the Different Types of Mortgage Loans?
- What Is the Process of Applying for a Mortgage?
- What Is the Difference Between Government-Insured Loans and Conventional Loans?
- What Is a Down Payment?
- How Much Down Payment Will I Need to Provide?
- Are There Any Mortgage Loans with No Down Payment?
- What Is an Escrow Account?
- What Is Home Equity?
- What Is the Difference Between a Loan and a Mortgage?
- How Do Mortgages Work?
- Where Can I Get a Mortgage?
- What Should I Look for in a Mortgage?
- Should I Pay My Mortgage Early?
- What Is the Average Mortgage Length?
- What Are the Advantages of a 15-Year Mortgage over a 30-Year Mortgage?
- What Are the Advantages of a 30-Year Mortgage over a 15-Year Mortgage?