Understanding Mortgages

If you're going to be responsible for paying a mortgage, you should know exactly what a mortgage is. A mortgage has three basic parts: a down payment, monthly payments and fees. Since mortgages usually involve a long-term payment plan, it's important to understand how they work.

A mortgage has three parts: a down payment, monthly payments and fees. 

• The monthly payment is the amount needed to pay off the mortgage over the length of the loan and includes a payment on the principal of the loan as well as interest. There are often other fees included in the monthly bill.
• The fees are various costs you have to pay up front to get the loan.
• The down payment is the up-front amount you pay to secure a mortgage. The larger your down payment, the better your financing deal will be. 
  

The specifics of mortgages and the prevailing practices around home loans varies from region to region. Be sure to conduct thorough research on how mortgages are structured in your region.