Financing

What is a mortgage?

A mortgage is a loan that you obtain to close the gap between the cash you have for a down payment and the purchase price of the home that you”re buying.

Mortgages typically require monthly payments to repay. The mortgage payments are comprised of interest, which is what the lender charges for use of the money you borrowed, and principal, which is repayment of the original amount borrowed.

A Loan Officer will help you select a mortgage to meet your needs and will help you shop around for a mortgage.

Suppose that you borrow $144,000 (and contribute $36,000 from your savings as the down payment) for the purchase of your $180,000 home. If you borrow $144,000 with a 30-year fixed-rate mortgage at 7 percent, you pay $200,892 in interest charges over the life of your loan. $200,892 is a great deal of interest and more than the purchase price of the home or the loan amount originally borrowed!

So that you spend wisely on your mortgage, and get the mortgage that best meets your needs, it’’s important to understand the mortgage options out there.