How Do Mortgages Work?
Buying a home is one of the largest steps we can take on the Road of Life, but locking ourselves into such a big commitment can be anxiety-inducing, with one of the most common questions for young potential homebuyers being, “How do mortgages work?” Today, we’re here to clear up any confusion to make buying a home an exciting process, not a frightening one!
Let’s cut to the chase: what is a mortgage, and how do they work?
A mortgage is a loan between yourself and a lender for the express purpose of buying a home. The lender agrees to purchase the home while you pay them back over time with interest. Repayment timespans can vary, so you’ll want to work through this with our mortgage specialists.
What sets mortgages apart from other types of loans is that failure to repay your loan means that the lender can legally sell your home to recover their financial losses. However, this is a worst-case scenario and shouldn’t discourage you from initiating a mortgage. If anything, it’s important to consider that receiving a mortgage only comes from a rigorous approval process, where your lender of choice will review your proof of funds to determine if you are a reliable recipient. These checks and balances are in place to assure both parties that you are financially stable enough to pay off your loan.
A home mortgage is a positive step on the Road of Life as you work to secure your dream home! If you would like to learn more or have any questions or concerns about taking out a mortgage, The Peoples Bank has multiple Mortgage Loan Originators who would be happy to speak with you any time. We also offer a variety of free mortgage-related calculators which can help you look at different amounts and payback scenarios to get an idea for yourself as well. Just consult our Financial Calculators page!