What is a Mortgage Loan?

From our Mortgage Loan Glossary, the definition of a mortgage loan is:

Mortgage Loan - Loan that is secured by the title to a property. The accepted appraised value for the property typically determines the maximum loan amount for a borrower. A combination of borrower qualifications and property specifications mostly determines the specialized loan program that a borrower is ultimately approved for.
MORTGAGE LOAN EXAMPLES: Mortgage Loan

From this definition the next mortgage loan element to understand what a mortgage loan is derives from what the qualifications are to obtaining a mortgage loan.

Mortgage Loan Qualifications

Typically a mortgage loan program is determined by a mortgage loan consumer and/or mortgage loan professional based on three primary criteria:
1. Income: The income of a borrower determines the amount of mortgage loan they may afford which may be seen directly through what is known as a borrower's D.T.I., also known as "Debt to Income". From our Mortgage Loan Glossary the definition of Debt to Income is:

Debt to Income (DTI) - Ratio of gross income to housing and non-housing expenses combined.
RELATED MORTGAGE TERMS: Gross Income

2. Credit: The credit of a mortgage loan applicant directly affects the type of loan program they may qualify for. The results of the credit score of an applicant on the mortgage loan program they qualify for may be determined through the "mortgage rating" that mortgage professionals can obtain through mortgage loan lender and mortgage loan bank guidelines. From our Mortgage Loan Glossary, the definition of a mortgage rating is:

Mortgage Rating - Rating given to a borrower based on the number of mortgage lates they have had over a specific period of time. Used as one facet for determining an individual's interest rate, many lenders use one year of mortgage payment history to rate a borrower. An example for this type of rating would be a "B rating" for a borrower that has a 1x60 (one payment delinquency that had not been paid for 60 days).
RELATED MORTGAGE TERMS: Mortgage Late
MORTGAGE LOAN EXAMPLES: Mortgage Loan Rating

Such a mortgage rating is determined through mortgage company's reporting of delinquencies to credit bureaus by their borrowers.
3. Equity: For current mortgage loan holders, the equity that they have in their property will affect the mortgage loan refinance program available to them. Specifications for such mortgage loan programs including interest rate and loan amount are directly influenced by the amount of equity available in property. Furthermore, the amount of equity held in a home is determined by the appraised value received for a property, and can be a determining factor for the quality of the mortgage loan qualified for. Such a factor is sometimes held to the bias of the mortgage loan bank or mortgage loan lender financing the loan, which is one good reason for acquiring an independent appraiser when refinancing a mortgage loan.