Any prospective homeowner should know exactly what a home mortgage is, including how to pay it and other details. The Youtube video, What are Mortgages? by Wall Street Survivor shows everything you need to understand before buying the house of your dreams. Let’s find out more!
A mortgage is a loan from a bank or another institution that someone needs to be able to buy a house. However, it differs from other loans because the bank can use your house as collateral.
If you don’t pay the loan properly, the bank can take your house away. But let’s try to understand this better with an example.
A couple finds a home they want retailing at $500,000, and they don’t have enough to pay that upfront. So, they turn to the bank, and the teller will ask them how much they’ll pay upfront, which is known as a down payment. Most down payments have to be approximately 20% of the home cost. In this example, the couple puts down $100,000, so they’ll need to get a loan for $400,000 to purchase the house. Now, the bank has to check their credit scores and other financial matters before the loan can be approved.
You can check the rest of the video for full details about mortgages and payments.