And depending on the mortgage, you’ll find different interest rates, qualifying requirements, and down payment options. Mortgages are almost always long-term loans, so borrowers can pay them back over time and can usually take 15 and 30 years to pay off. Then the borrower pays back that amount over time, plus an additional percentage of the original loan as interest that the lender collects as a fee for providing the loan. What is a mortgage?Ī mortgage loan is similar to most other loans in that lenders pay out a set amount of cash up front to the borrower. We’ll go over the different common mortgage loan types, what sets them apart, and who is right for each. The loan you take out to cover the remaining value of the home after you supply a down payment is a mortgage, and there are a lot of different types of mortgages to consider.
In order to buy a home, you’ll likely have to take out a loan to cover most of the price.
