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A mortgage represents a loan or lien on a property/house that has to be paid over a
specified period of time. Think of it as your personal guarantee that you'll repay the money
you've borrowed to buy your home. Mortgages come in many different shapes and sizes,
each with its own advantages and disadvantages. Make sure you select the mortgage that
is right for you, your future plans, and your financial picture.
What is an amortization schedule?
The month-by-month allocation of your monthly payment to the loan's interest and principal
is called an amortization schedule. With most loans you pay off the interest on the loan
before you pay off the principal (or the actual amount you borrowed). Your lender will
provide an amortization schedule to show you how the percentage of your principal paid off
increases with every payment, while the percentage of interest decreases. See an example
of an amortization schedule [PDF 10K ].
Choosing the right mortgage.
Once you decide on the mortgage you want, do your homework. Different lenders offer
different rates, points, and fees. Ask around and compare.
Understanding the benefits of different mortgage offerings can be a complex process. How
do you figure it all out?
Mortgages:
