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Growella Explains

What Is A Mortgage? : An Introduction For First-Time Home Buyers

Transcript

A mortgage is a loan you get for real estate. The difference between mortgages and other loans, though, is that you can choose how your mortgage loan is repaid. This plain-language explanation of how mortgages work teaches you the basics.

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Episode Transcript

I’m a homeowner and recently bought my first house.

Wow! are homes expensive!

I didn’t have all that money just laying around to just a home with cash, so instead I used a mortgage.

A mortgage is a loan you get for real estate and they’re just like other types of loan.

You borrow some amount, you get a schedule for making the payments, and when you pay the loan off, that’s it.

No more payments.

The big difference between mortgage loans and other loans, though, is that with a mortgage, you get to choose how your loan is repaid.

You can choose whether your payback period is short or long; whether your interest rate can change or is fixed; and, even whether you want to pay closing costs or not.

Being able to customize your mortgage is amazing but, so long as we’re telling the truth here, I had so many choices that I kind of felt of overwhelmed.

Enter my mortgage lender, who was awesome.

She was licensed, and helpful, and honest and she helped me to make sense of my options.

In the end, I picked a great mortgage that fit within my budget, and got a really low rate in the process.

I’m totally in love with my house.

And I couldn’t have bought it without my mortgage.

Click to get today’s mortgage rates.