BUYING a home USUALLY MEANS taking out A M O RT G A G E .
TH AT M E A N S Y O U borrow MONEY TO buy A HOME, using T H AT H O M E A S collateral FOR THE LOAN.
STEP 5 • ARRANGING YOUR MORTGAGE
Make sure you have a mortgage you can live with. There are lots of options available that let you customize your mortgage to suit your financial goals and needs.
Mortgage payments are made up of a principal sum (the amount borrowed) and interest (the cost to you of borrowing money).
The best plan for any type of mortgage is to minimize the amount of interest you pay— and lenders offer several ways to help do this:
A larger down payment means your home ulti- mately costs less because a smaller mortgage means less interest.
A shorter amortization, the period over which a loan is repaid.
A weekly or biweekly payment schedule, instead of monthly.
Additional lump sum payments.