A one-time payment. These are loans to be paid back in a period of time. They allow a person to purchase a house and then become an owner.
Mortgages are different from students or personal loans, in they require the property to be put up as collateral. If the mortgage loan isn’t repaid at the time it is due, then the bank will be able to seize your home and take possession.
In order to get a mortgage, the potential home buyer has to make a down deposit. The down payment is equal to the price of the home. Down payments vary from banks to banks, however the minimum is generally 20%.
If the property buyer’s financial statements and credit score have been verified, then they will be granted an amount of money to cover the rest after the down payment is placed. This loan will include the option of a fixed or floating rate. Fixed rates are fixed for a certain amount of time, also known as a “term”. The term “amortization” refers to the period that it takes to pay back the credit. It could be 20-30 and 40 years.
To learn more about mortgages, look at the video above.