Mortgage Information

What is mortgage finance?

A mortgage is a legal instrument used to create a registered lien on real estate by contract between a borrower and a lender. By taking out a mortgage, an individual is able to finance the purchase of a home without having to raise all the funds upfront. The lender provides most of the funds required for the purchase, while the borrower repays the lender over the term of the loan. The borrower (mortgagor) uses the mortgage to pledge real property to the lender (mortgagee) as security against the debt.

Why is mortgage finance important?

The development of housing finance is inextricably linked to a country’s economic development. It helps strengthen financial institutions, reduce poverty, promote social stability, and improve people’s lives. The housing finance market is among the most important in any economy, because it accounts for a sizeable portion of a country’s productive activity through backward linkages to land, labor markets, and related industries.

At the individual level, enabling access to home ownership not only meets shelter, a basic need, but provides individuals with dignity and collateral – a means of economic empowerment.