When it comes to money, it’s helpful to know some of the concepts associated with loans, personal finance, and wealth. Mortgages are a type of loan given by a financial institute to help fund the purchase of a house, as described in the video.
A financial institution or a bank gives a mortgage to a person or couple who desires to purchase a house. Mortgages aren’t the same as personal and student loans because the bank uses the house as collateral.
If you can’t make payment, the bank can take possession of your home.
When you find the ideal place, a down payment of 20% of the price is required, but this varies from bank to bank. To see if you’re fit for a mortgage, the bank must review your credit reports and income statements. The amount, the interest rate (which might be set or variable), and the amortization period are all stated in the written agreement. The amortization period is the time within which you must pay off the entire mortgage.
You can someday own your ideal place with a mortgage, as opposed to constantly forking out for rent. Find out if you’re eligible for a mortgage so you can become the proud owner of your ideal home.