Mortgage Basics

What is it?

So you’re ready to buy a house. You’re probably going to need help financing such a large purchase, which usually means getting a mortgage. A mortgage is an interest in property, created by a written document, that secures the repayment of a loan. When you take out a mortgage loan to buy a home, the home becomes the collateral for the loan. If you don’t repay the loan as agreed, the lender may take your property and sell it to satisfy the debt.

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What is private mortgage insurance?

Private mortgage insurance (PMI) protects the lender against the risk of the borrower defaulting on the mortgage. Lenders generally require you to purchase PMI if your loan is more than 80% of the value of your home. Without PMI, you may be unable to qualify for a mortgage.

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