when does a loan stop being a loan and become a mortgage? - U2 Feedback

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Old 11-29-2001, 10:36 PM   #1
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when does a loan stop being a loan and become a mortgage?

if i took out a loan on an expensive car, like a $ 200 000 car, would that be a mortgage?
does mortgage apply to anything over a certain amount or does it need to involve property?

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Old 11-30-2001, 12:22 AM   #2
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Loan is to personal property as mortgage is to real property.

(Real property: land, buildings, etc.)
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Old 11-30-2001, 12:48 AM   #3
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In the world of banking, mortgages are only on land property, including homes on land property.

The distinction is in the term, which is usually considerably long (30 years on average) and the interest rate is usually lower than with a regular loan, where repayments are usually no more than two or three years and the rates are higher. Plus, in the U.S., interest on mortgages can still be written off on taxes, even though, before the 1980s, this was the case with all loan interest.

Basically, it is a legal distinction.

I used to work in a bank, so this is how I know this.

Melon

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Old 12-01-2001, 08:32 AM   #4
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What car could possibly cost $200,000???? *imagines the Jaguar she could get with that much cash

Seriously, I worked in merchant services in a bank and there was this one guy who rang from a caryard and said he had a customer paying for a $280,000 Mercedes with either an Amex or Diners. She 'still hadnt decided' which card to use. <insert mega rolleyes here>.

Banks are fun.
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Old 12-01-2001, 08:45 AM   #5
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Quote:
Originally posted by Angela Harlem:
What car could possibly cost $200,000????
lots of cars can cost $200 000

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Old 12-01-2001, 09:19 AM   #6
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me: "I think I'll take the Maserati, thanks"

Salesdude: "And how would you like to pay for it?"

me: "Finance baby!"

hehe, I know they can cost shitloads, but the idea of paying for a car with enough money to pay off a home, with finance makes me laugh. Avco at 26% on $200,000
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Old 12-02-2001, 11:54 AM   #7
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Quote:
Originally posted by U2Bama:
Loan is to personal property as mortgage is to real property.

(Real property: land, buildings, etc.)

Wow, Bama - I'm impressed. And you not even a banker.


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Old 12-02-2001, 01:55 PM   #8
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Quote:
Originally posted by melon:


The distinction is in the term, which is usually considerably long (30 years on average)
30 year mortgage is not the average, its the max. You will find it had to get financing for longer than 30 years.



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Old 12-02-2001, 02:42 PM   #9
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*has dreams about driving a $200 000 aston martin*
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Old 12-03-2001, 07:32 PM   #10
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Quote:
Originally posted by Crzy4Bono:

And you not even a banker.
No, but:
1. My career is in commercial real estate;
2. My main client is a bank;
3. I pay a mortgage on my home; and,
4. I recently paid off my car loan.

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[This message has been edited by U2Bama (edited 12-03-2001).]
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Old 12-03-2001, 07:40 PM   #11
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Quote:
Originally posted by TheU2:
30 year mortgage is not the average, its the max. You will find it had to get financing for longer than 30 years.
well, to be more specific, there are usually 2 terms i've run into--15 year and 30 year mortgages. most cannot afford 15 year mortages, so they go to 30 year mortgages.

which is crazy. taking 30 years to actually own your own house? this wasn't always the way it was.

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[This message has been edited by Malibu Whortense (edited 12-03-2001).]
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Old 12-04-2001, 04:00 AM   #12
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The average here is 25 years, which is also ridiculous.

Thanks to variable offsets and such, it is possible to pay it off quicker, Im sure you guys have the same deal. These offset facilities should apply to larger loans in general, but Im not sure they do.
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Old 12-04-2001, 07:35 PM   #13
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I'm just happy because I have neither...not for long though, I'm going to college next year, and it'll be "HELOOOOOO LOANS!!"

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