What is a Mortgage?

If you have enough money to pay cash for your home, you can happily thumb your nose at bankers and other mortgage lenders. If you can afford to pay cash for your home, who needs them?!

 

As for the rest us, we need to take out a mortgage to buy a home for the simple reason that doing so is the only way we can afford a home that meets our needs. This chapter helps all non-wealthy folk to comprehend mortgages and then choose one. (If you are wealthy and have a great deal of money to put into a property, this part of the book can also help you to decide how much of your loot to put into your home purchase.)

 

Start with the basics. What is a mortgage? A mortgage is nothing more than a loan that you obtain to close the gap between the cash you have for a down payment and the purchase price of the home that you're buying. Homes in your area may cost $70,000, $170,000, or $370,000. No matter — most people don't have that kind of spare cash in their piggy banks.

 

Mortgages typically require monthly payments to repay your debt. The mortgage payments are comprised of interest, which is what the lender charges for use of the money you borrowed, and principal, which is repayment of the original amount borrowed.

 

Learning how to select a mortgage to meet your needs ensures that you'll be a happy homeowner for years to come.

 

Learn more about mortgages….