Q:

How do Provident funding mortgages differ from traditional mortgages?

A:

Quick Answer

Provident Funding mortgages do not different from traditional mortgages in terms of structure or liability. The interest rates and repayment schedules are subject to change based on geographic location and specific agreements reached by all parties involved. Mortgage rates also differ drastically from entity to entity during different time periods.

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Full Answer

A mortgage is a type of loan in which a bank or financial institution agrees to lend money on the basis that the rights to a specific piece of property be placed as collateral. In most cases, an individual or married couple seeks a mortgage to allow them to purchase a home for which they would otherwise not be able to afford. In this scenario, the bank evaluates the property in question to determine its worth and grants the borrowers funds to secure the property's purchase.

In exchange, the borrowers legally give the lender the right to obtain possession of the property in the event that they default on any repayments. While the specific details of delinquent payments are outlined on a case-by-case basis, in all situations, once the bank forecloses on the home it becomes the legal owner. The bank then has the right to evict the tenants and sell the home to recoup the rest of the loan repayment.

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