#1. Is a mortgage is a home loan. No. A mortgage is actually the piece of paper that gives a bank the right to take back your home if you fail to pay. You don’t truly pay off a mortgage – you pay off a home loan, which “voids” the mortgage at the end. … #2. Does my loan mature when my term ends. You could be forgiven for thinking so, but not necessarily. The term of a loan is the length of time your lender uses to calculate your monthly payments. Most loans mature at the end of their terms. #3. An APR is a representation of how much a loan will cost me. That was actually the initial idea behind “annual percentage rates”, or APRs, which include all the costs associated with your loan example: interest, upfront closing costs, and other fees – to know what your loan really costs you annually as a percentage. But you cannot use APRs to shop loans for the best deal, because lenders don’t all calculate their APRs the same way. Sucks, but is true. #4. Is the principal amount of my loan decreasing over time. Kind of. But the principal will not be affected for a while. Most loans are designed for the first years almost exclusively paying interest. Which does not feel right since that makes the first few years in a home more like paying rent, technically speaking. #5. You can choose which bank will hold your mortgage. No. Most banks immediately sell your mortgage to other lenders after they’ve closed your loan. Which means an entirely different company might ultimately service your loan over time. The good news is this will not have any impact on your loan or payment.
Hope this info helps everyone…….have an easy daySee More