Here are some important things to know about mortgages:
- A mortgage is a loan that is normally used to buy a home or other property.
- The loan usually comes from a bank or building society. They are called the lender.
- Most people pay the loan back over a long period of time, usually 25 or 30 years. This time period is known as the term. You normally pay back an amount every month.
- The lender will add interest on to your loan. This means you pay back more than you borrowed.
- The loan you receive is called the capital. You repay the capital, plus the interest.
A mortgage is secured against the property you are buying until it is paid off. This means that the lender can take back the property and sell it, if you do not keep up with your monthly payments. This is called repossession. But repossession should only be a last option. If you are having financial problems, your lender should help you as much as possible.