What is Mortgage The meaning of the word mortgage means “mortgage” is mainly used to describe some kind. Of real estate financing system. The functioning of the system varies by country. Only the Capital Markets Board (CMB) has proposed four methods that sample three American and one German model.
The methods are based on the use of long-term housing loans. In the form of 15-20 years in exchange for mortgages to be established through the residence by financial institutions to those who want to own a residence in general. Receivables born from loans are transferred. To Mortgage-Based Securities Organizations and these organizations sell by exporting mortgage investment funds or asset-based securities in exchange for their receivables. The system feeds itself. Funds derived from the securities of residential loans are transferred to the system again, so financial institutions can finance long-term housing loans.
The bank buys a property requested by the customer on behalf of the receiving person in advance and transfers the property to the customer. However, the property is mortgaged in exchange for the customer’s debt to the bank. According to a specific payment plan, the customer pays the bank with monthly payments until the end of a previously set maturity.
There is little distinction between bank housing financing loans widely implemented in Turkey. Today, financial institutions finance mortgage-secured housing with maturities of up to 48 or 60 months. The “Mortgage” system is spreading over a lot longer. There are usually 20 to 30-year maturities, which can reduce monthly payments to the rental.
How does the mortgage market work?
What is Mortgage There are two types of markets in the mortgage market, the primary market is made up of loans that financial institutions give to people. Here is the reassurance that is often taken into account the consumer’s pay power and the housing he wants to buy. There are service provider companies abroad that help financial institutions, but almost this structure does not exist in Turkey. In the second-hand market, financial institutions or institutions buy these loans and sell them to investors from abroad or abroad. Although different methods are applied here, financial institutions often buy and sell bonds or stocks. At its core, asset-based securities are exported. Here, buyers are rich, pension funds, insurance, people from the wholesale market who are not directly related to the customer. The second-hand market prevents financial institutions from experiencing liquidity problems and helps them recover the guarantee of the loans it gives.
Stability is just one of the conditions required for the system to work meaningfully. A much more important condition is the possibility that financial institutions or housing finance companies can somehow convert their accumulated credit credits into sellable assets. This method, which financiers call “securities”, requires that a mortgage-based securities paper be bought and sold in a secondary market. In this way, even though the property that is the basis of the securities paper does not change hands, the beneficiary of the installments can easily change. What’s more, transactions such as the sale of the property by the user, swapping it for another mortgaged property, are also done quickly and safely between the system. So you can dispose of a property you buy with credit, dispose of it before the refunds are over, and you can buy another property that you like more. Your past payments are decreasing from your loan for the new property.
What is Mortgage This system has been implemented for over two hundred years, albeit with partial differences in various countries around the world. Similarly, the system facilitates the acquisition of a residential, making a great contribution to the improvement of building quality, urban planning to an effective point, and recording property and purchases.
The housing concept of the state and municipalities is based on the logic of mass housing at a large level. The approach to public housing brings with it big rants in the location where it was created. However, the “mortgage” system requires an effective capital market. The ups and downs of economic conditions we’ve been experiencing over the last decade have unfortunately taken away our shallow capital markets from the event.