Mortgage
A mortgage is a loan secured by real estate, where the borrower agrees to repay the lender over time with a set interest rate and schedule.The property serves as collateral, meaning the lender can foreclose on the property if the borrower fails to meet the repayment terms. Mortgages are commonly used to finance the purchase of homes or other real estate, with repayment periods typically ranging from 15 to 30 years.
Example
A homebuyer takes out a 30-year mortgage with a fixed interest rate of 4% to purchase a house, making monthly payments to the lender.
Key points
• A loan secured by real estate, where the property serves as collateral.
• Used primarily to finance the purchase of homes and real estate.
• Repayment periods typically range from 15 to 30 years, with fixed or variable interest rates.
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