What is a Mortgage?
A mortgage is a specialized legal loan used specifically to purchase real estate. The property itself serves as collateral, securing the lender's investment in case the borrower fails to make agreed payments.
Principal and Interest Breakdown
Every standard monthly mortgage payment is split into paying off the primary amount borrowed (Principal) and paying the lender's cost of capital (Interest). In the early years, the vast majority of the payment goes toward interest.
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