Is a Mortgage a Debt?

How about a riddle, yeah? What looks like something but is not something? I think my answer would just be “something else” or “something close” and I may be wrong on this, but then again, who made the rules? 

In financial literacy, things that concern long-term plans are considered with extra caution, more like one carefully reviewing laid plans, again and again, to be almost certain of the best decision. 

One of the perks of financial literacy and long-term plans is the identification of how to treat money such that it becomes acquainted with one and a best possible return to become of value, instead of just an expense. 

In today’s read, we shall review mortgage loans while also considering if mortgages are another form of debt or an asset. These and other things would we learn after this article. 

A mortgage is a loan used to buy or keep a house, land, or other pieces of real estate. The borrower promises to repay the lender over some time, usually in a series of monthly instalments divided into principal and interest. The property is used as security for the loan. 

From another angle, the mortgage is seen as a property that could be used to serve as collateral in the long run. Going by the latter, a mortgage may not be seen as a loan but as an asset to serve as collateral. 

A mortgage is a sort of housing/home loan that has terms attached to it. Because your house or property is used as security and the mortgage is recorded on the title to your home, with this, a mortgage can be called a secured loan. 

Even with the arranging costs, a mortgage is likely to be less expensive than a personal loan. However, you must examine the overall cost of borrowing - including mortgage arrangement costs - of the two forms of loans to be confident they will provide you with the best bargain. 

People have often wondered if seeking a mortgage is some type of debt since most dread being indebted. Well, a mortgage is a type of loan specifically used to buy real estate, such as a home or a condominium. Because the subject real estate is used as collateral for the loan, it is a type of secured debt. Mortgages, on the other hand, are so distinctive that they deserve to be classified as a debt, but hey... it is a good type of debt. 

In the real sense of it, what is considered good or bad? Water is considered not to have an enemy, according to popular Nigerian Afrobeat icon of blessed memory, Fela Anikulapo-Kuti in his hit song “Water no get enemy” which topped the charts for its serving period, doesn’t still negate the presence of flood that washes to halt mouth gaping edifices. My point? Nothing is good or bad, it is how they are of use that counts for its validation. 

Because your monthly payments eventually develop value in your property, mortgage debt has traditionally been regarded as one of the safest types of good debt, hence a mortgage is considered good in this instance. 

A mortgage is a soft type of good debt issued for the purchase of the real estate, such as a house.  

If you would pick anything in summary, please note that a mortgage is a form of secured debt as the subject real estate can be collateral against the loan. However, mortgages are so unique that it is often called debt.