What is a mortgage?
How does one afford to buy a home? Who has that much money sitting around? “I don’t have that much money, how can I ever buy a house?” These are all reasonable questions when facing the homebuying market. Fortunately, mortgages provide qualifying individuals that would like to buy a home with the financial means to do so. This article will explain the concept of mortgages.
A mortgage is a contract for a bank (or other financing organisation) to provide a qualified homebuyer with the funds to purchase a home. In exchange for the mortgage company providing the funds for the home purchase, the homebuyer agrees to make payments back to the mortgage company with additional interest.
Interest is a percentage of your mortgage loan that is added to your monthly payment during the course of the mortgage. This is an amount that is generally recommended by a government agency and is essentially a fee charged by the bank each month. This is the way the mortgage company makes money off of your loan.
Most do not have the money to pay full price on a home in one payment. This is the purpose of the mortgage. For qualified homebuyers, the mortgage company puts up the money to pay off the home in exchange for additional interest on the monthly loan payments.
At Mortgage House, we’re no strangers to the homeowner’s journey. It’s an exciting and very rewarding one. If you’re thinking of applying for a home loan, you can Apply Online today to get started!