Buying a Home? Understand Your Mortgage

01

A mortgage is a secured loan

You borrow to buy a home, and the property is collateral. Payments include principal and interest.

02

Fixed vs adjustable

A fixed rate stays the same. An adjustable rate can change after an initial period, so budget for higher payments.

03

Save beyond the down payment

Closing costs, moving, repairs and furnishing add up. Keep a cash buffer after closing.

04

Credit and the full payment

Your credit profile can affect the offer. Budget for principal, interest, taxes, insurance and upkeep. Example: $300,000 at 6.5% over 30 years is about $1,896/month for principal and interest.

05

Before you apply

Check your credit report, compare Loan Estimates, get preapproval and avoid taking on new debt.

Sources

Sources & notes

CFPB · Federal Reserve · Cover photo: Unsplash

Figures and rules can change. Verify current details before acting.

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Educational information, not financial advice.