Taking out a mortgage is a major milestone in our lives. For anyone looking to buy a home soon, here’s a simplified explanation of a mortgage.
You: I want to buy this house for $5.
Bank: Cool. You bring $1 and we will lend you $4.
You: what do you get out of it?
Bank: I get to charge you 6% of the loan amount.
You: how will I pay you back?
Bank: you’ll pay back over 30 years with a same payment every month.
You: what if I don’t pay?
Bank: we take your house and ruin your credit.
