What are some popular loan options for first-time home buyers?

For first-time home buyers, there's more flexibility and when it comes to structuring your mortgage. Here are some of the more popular loans options. 1. FHA Loan – FHA loans are fixed-rate mortgages backed by the government and insured by the Fe

What is the difference between interest and principal in a mortgage loan?

Outside of closing costs or origination fees, most loans can be broken down into two parts -- principal and interest. 1. Mortgage Principal – Principal is the total amount of money borrowed for your loan. It can be calculated as the price o

How does loan amortization work?

Amortization is the process of how the principal of the loan is paid down over time through regular, fixed payments. Lenders will illustrate how this works in an “amortization schedule." The schedule shows how the amortization process wor

What is the mortgage interest rate?

The interest you pay on a mortgage is the annual cost that you pay to borrow the money, which is calculated as a percentage of the loan balance. Mortgage interest rates do not reflect origination fees or other charges, whereas the APR does.

What is APR on a mortgage?

APR stands for "annual percentage rate." The term is used to explain the actual cost of borrowing money more precisely. APR combines the loan's interest rate, broker fees, origination fees, and other closing costs. By including these fees in t