Mortgages

A mortgage is a type of loan specifically used to purchase real estate, where the property itself serves as collateral for the loan. In a mortgage agreement, the borrower receives funds from a lender to buy a home and agrees to repay the loan over time, typically in monthly installments that include both principal and interest. If the borrower fails to make payments, the lender has the right to foreclose on the property, meaning they can seize it to recover the unpaid loan amount. Mortgages usually involve a long-term commitment, often ranging from 15 to 30 years, and come with varying interest rates—fixed or variable. The terms of a mortgage can include aspects such as down payment requirements, amortization schedules, and conditions for prepayment or refinancing. Mortgages are essential components of the real estate market as they enable individuals and families to finance the purchase of homes, which they might not be able to afford outright.