What are Mortgages?
For anyone looking to buy a home, it is important to understand mortgages and how they differ from one another. There are many different factors that affect how much you will have to pay for the mortgage in the long run, and understanding these differences can make a larger impact on finding the one that is best for you.
A mortgage is a loan from a bank or other financial institution that can be used to finance a home. The institution will use the property as collateral, meaning that if you fail to make payments, you can end up losing your home.
When going to file for a mortgage, the institution will ask for some form of downpayment. This should be at least around 20 percent of the price of the home they are looking to take the mortgage out on, but the amount can vary from bank to bank.
The bank will then take a look at the credit reports and income statements of the buyer or buyers. This is the bank’s way of checking that the buyer or buyers will be able to produce the fund necessary to make their payments, as well as ensuring that they have a good history of making payments.
For additional information on mortgages, please review the attached video.
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