What is a Mortgage?....

A mortgage is a loan someone obtains which is secured by real estate or another valuable asset.  Which means that if for whatever reason you default (fail to pay back the mortgage) the lending institution can seize your assets to make up for their loss.  A mortgage payment is made up of two parts and is usually paid in monthly installments.  The first part is the Principal: this is the money goes to actually pay back the original amount that you borrowed.  The second part is the Interest: the interest is the cost that the lending institution charges you for borrowing money from it. The interest rate you receive on a loan is dependant on several factors including: the prevailing market interest rate, the type of loan you choose, and your credit history.