A mortgage is a type of loan used to purchase or maintain a home, plot of land, or other types of real estate. The borrower agrees to pay the lender over time, typically in a series of regular payments that are divided into principal and interest. The property then serves as collateral to secure the loan.

A borrower must apply for a mortgage through their preferred lender and ensure that they meet several requirements, including minimum credit scores and down payments. Mortgage applications go through a rigorous underwriting process before they reach the closing phase. Mortgage types, such as conventional or fixed-rate loans, vary based on the needs of the borrower.

KEY TAKEAWAYS

1. Mortgages are loans that are used to buy homes and other types of real estate.
2. The property itself serves as collateral for the loan.
3. Mortgages are available in a variety of types, including fixed-rate and adjustable-rate.
4. The cost of a mortgage will depend on the type of loan, the term (such as 30 years), and the interest rate that the lender charges.
5. Mortgage rates can vary widely depending on the type of product and the qualifications of the applicant.