Introduction:

Feeling confident and prepared to purchase your dream home, but feeling a bit uncertain about the array of financing choices available? Typically, acquiring a loan is essential to facilitate this process. You make a cash down payment and secure a loan using your new home as collateral for the remaining amount. A thorough comprehension of these financial aspects is pivotal for ensuring a seamless and successful home-buying experience.

A mortgage is a loan specifically used to purchase real estate. It is typically repaid over a set period, usually ranging from 15 to 30 years, through monthly payments that include both principal and interest. The property itself serves as collateral for the loan, meaning that if the borrower fails to make the payments, the lender has the right to repossess the property through foreclosure. Mortgages can have fixed or adjustable interest rates, with the terms and conditions varying based on the lender and the borrower's financial situation. Homebuyers often rely on mortgages to finance their purchase of property, making it a crucial financial tool in the real estate market.

In the following sections, you will learn about different types of mortgages, interest rates and mortgage closing costs that will help you choose the right type of mortgage for your situation.