Once upon a time, there was a family who wanted to buy a new house. They went to a bank to get a mortgage to pay for it. The bank asked them to put some money as a margin to make sure they could pay back the loan.
The family had two options: either buy a ready-made house or buy an old one and rehab it. They decided to buy an old one and rehab it.
The bank sent a surveyor to check the house and make sure it was worth the money they were lending.
The bank was the originator of the mortgage, meaning they started the process of lending the money.
If the family couldn't pay back the mortgage, the bank would have recourse, meaning they could take the house back.
But the family worked hard and made the house look like new. They rented it out and made enough money to pay back the mortgage and live happily ever after.

Reflections

1. What did the family want to buy?
2. How did they pay for the house?
3. Why did the bank ask them to put money as margin?
4. What were their options for the house they wanted to buy?
5. What did the surveyor do?
6. Who was the originator of the mortgage?
7. What would happen if the family couldn't pay back the mortgage?
8. How did the family make enough money to pay back the mortgage?