Mortgages

Front

What is a mortgage?

Back

A mortgage is a loan specifically used to purchase real estate, where the property itself serves as collateral for the loan.

Front

What factors do banks consider when approving a mortgage?

Back

Banks consider factors such as your salary, credit score, debt-to-income ratio, and employment history.

Front

What is the primary incentive for banks to lend money for mortgages?

Back

Banks expect to profit from the interest charged on the loans.

Front

What happens if you cannot repay your mortgage?

Back

The bank may sell your home to recover its investment.

Front

How many payments are typically made on a 20-year mortgage?

Back

240 payments.

Front

Why might someone choose a short-term mortgage despite higher monthly payments?

Back

They pay less interest in total over the life of the loan.

Front

What is the term for the amount of money borrowed in a mortgage?

Back

Principal.

Front

What is interest in the context of a mortgage?

Back

Interest is the cost of borrowing money, expressed as a percentage of the loan amount.

Front

What is equity in a home?

Back

Equity is the difference between the market value of the home and the amount still owed on the mortgage.

Front

What is a down payment?

Back

A down payment is the initial amount of money paid upfront when purchasing a home, usually expressed as a percentage of the purchase price.