Mortgage
A mortgage is a loan used to purchase real estate, where the property serves as collateral. The borrower repays the loan over time, typically 15 to 30 years, with interest.
Mortgages can have fixed or adjustable interest rates. Monthly payments include principal, interest, property taxes, and insurance (PITI), often managed through escrow. If the borrower fails to make payments, the lender can foreclose on the property. Some mortgages include a balloon payment or begin as an interest-only loan.
Related Terms
Principal
Principal is the original amount of money borrowed in a loan or the original amount invested. It doe...
Interest
Interest is the cost of borrowing money or the return earned on deposited funds, typically expressed...
Amortization
Amortization is the process of paying off debt through regular payments over time. Each payment cove...
APR
Annual Percentage Rate
APR is the annual rate charged for borrowing or earned through investment, expressed as a percentage...
Escrow
Escrow is a financial arrangement where a third party holds and manages funds or documents on behalf...
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