What is a Mortgage?
A mortgage is a loan that people take out to purchase a home or property. This financial agreement allows you to borrow a large sum of money, typically from a bank or financial institution, with the home itself acting as collateral. In simple terms, the lender provides the funds for the property purchase, and in return, the borrower agrees to repay the loan over a set period, often 15 to 30 years. During this time, the borrower makes regular payments, which include both the principal (the amount borrowed) and interest.
Types of Mortgages Available
There are various types of mortgages to consider depending on your financial situation. Fixed-rate mortgages are the most common, where the interest rate remains the same for the duration of the loan, providing stable monthly payments. Alternatively, adjustable-rate mortgages (ARMs) have interest rates that can fluctuate, typically starting lower but adjusting based on market conditions after a certain period. Choosing the right mortgage depends on factors such as your ability to make long-term payments, current interest rates, and your future financial plans. What happens fixed rate mortgage ends