What is a Mortgage

Down Payment

Closing Costs

Escrow

The Mortage Payment

Amortization

Understanding APR

Private Mortgage Insurance

How to figure Mortgage Interest

Mortgage Fees

Interest

The Index

What is a Mortgage?

In plain terms a mortgage is a legal contract that says if you don't pay the loan (or the money you borrowed) back (along with all of the fees and interest that are included with it), then the lender can and will take your house from you.

A mortgage has three main parts:

1. Size

2. Interest

3. Term

Size

Size is fairly self-explanatory. It is the total amount of the loan.

Interest

Interest is money that you pay to the bank. It is a charge for borrowing money. Interest is a percentage of the total amount of the loan and is paid monthly. For more information visit our section Understanding APR or Annual Percentage Rate.

The Term

The term is the amount of time it will take to pay of the loan.

© 2007 Scottie Watts