Understanding Mortgages
Learn the fundamentals of home financing, from basic concepts to advanced strategies.
What is a Mortgage?
A mortgage is a loan specifically designed to help you purchase a home. When you take out a mortgage, you borrow money from a lender and agree to pay it back over a set period of time, usually 15 to 30 years.
Key Components of a Mortgage
Principal
The original amount of money you borrow from the lender. Each monthly payment reduces this balance over time.
Interest
The cost of borrowing money, expressed as a percentage rate. Your interest rate significantly impacts your total payment.
Down Payment
The amount you pay upfront when purchasing a home. A larger down payment generally results in better loan terms.
Loan Term
The length of time you have to repay the mortgage. Common terms are 15 and 30 years.
Frequently Asked Questions