You can pay for it as well as other specifics. Youtube video: What is Mortgages? Wall Street Survivor explains everything that you should know before purchasing the home of your dreams. Learn more about it!
A mortgage can be described as a loan by a bank or other institution needed for the purchase of houses. It differs from other types of loans due to the fact that it can be used by the bank to use the house you own as collateral. It could even take the house you live in if you don’t manage to pay back the loan in date. But let’s try to understand the situation better by using an illustration.
A couple comes across a house that they like, valued at $500,000, but they do not have enough money to purchase it upfront. Therefore, they go towards the bank and the banker will ask the amount they’ll be paying in advance, also known as the down payment. The minimum amount of down payment has to equal 20% of the house’s cost. In this particular instance the couple put down $100,000. This means they’ll have to get a loan for $400,000 to purchase the house. Before the loan is approved it will be necessary for the lender to validate their financial data as well as their credit score.
To learn more about the mortgage or payment process, you can view the rest of the video.
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