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What You Need to Know About Mortgages

Our team at Donna Mullen & Associates specializes in all things mortgages, and we want to help you get the right mortgage for your needs. We also understand that the topic of mortgages can be somewhat confusing to those who are learning about them or preparing to take one on for the first time. In this article, we’ll provide a brief overview of the key things you need to know about mortgages and how they work.

What is a Mortgage?

First, let’s go over what mortgages are, exactly. To put it simply, a mortgage is a loan that is used to buy a home (or sometimes to refinance one). Homes are too expensive to buy outright, at least for the majority of us, so mortgages exist to allow people to cover the costs of a home without having to save up hundreds of thousands of dollars first.

How Does a Mortgage Work?

Essentially, mortgages work like this: You want to buy a home, but don’t have the cash to pay for the total cost upfront. To cover the rest, you take out a loan from a bank or other lender. The lender buys the property for you, and you enter into an agreement as to how and when to pay off the loan–you won’t technically own the home until the total cost is paid off, which typically takes anywhere from 15 to 30 years. One last thing to know about mortgages is that they are secured loans, which means that they involve collateral–specifically, in the case of a mortgage, the lender will repossess your home should you fail to keep up your end of the agreement and make the appropriate payments on time.