Understanding Mortgages: A Key to Homeownership

What is a Mortgage?
A mortgage is a loan that a borrower takes out to purchase a home or property. It involves borrowing money from a lender, such as a bank or financial institution, with the promise to repay it over a set period. The mortgage loan is secured by the property itself, meaning the lender can seize the home if the borrower fails to make the agreed-upon payments. Mortgages typically come with fixed or adjustable interest rates and are paid back through monthly installments. The principal loan amount and interest are usually repaid over a term of 15 to 30 years.

Types of Mortgages
There are several types of mortgages available, depending on the borrower’s financial situation and preferences. The most common type is the fixed-rate mortgage, where the interest rate remains the same throughout the life of the loan, providing stability in monthly payments. An adjustable-rate mortgage (ARM) offers a lower initial rate that may increase after a set period. Other mortgage options include government-backed loans like FHA or VA loans, designed to help individuals with lower credit scores or military service backgrounds. Choosing the right mortgage depends on factors like loan term, interest rates, and the borrower’s long-term financial goals. What happens fixed rate mortgage ends