Mortgage Basics: Understanding Interest Rates, Repayment Periods, and Loan Options for Property Purchases

mortgage

– contract; agreement to pay back loan- called a lein in real estate- an instrument the borrower uses to pledge real property to the lender as a security for a debt

A mortgage is a type of loan that is used to purchase a property such as a house or a commercial building. It is typically a long-term loan that is secured against the property being purchased. The terms of a mortgage will vary depending on the lender and the borrower, but generally, mortgages come with fixed or adjustable interest rates, repayment periods of 15 to 30 years, and the loan amount is based on the value of the property being purchased.

The borrower is required to make monthly payments to the lender until the loan is paid off. Failure to make payments on time can result in late fees, penalties, and in some cases, foreclosure or repossession of the property.

There are various types of mortgages available, including conventional mortgages, federal government-backed mortgages, and adjustable-rate mortgages. It is important for borrowers to carefully consider their options and choose the mortgage that best fits their financial situation and goals.

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