A mortgage loan

A mortgage loan is an agreement between you and a lender that gives the lender the right to take your property if you do not repay the money you borrowed, plus interest. It is a secured loan, as your property serves as collateral for the debt. Lenders approve a mortgage by checking your financial background, including credit score, income, and debt-to-income ratio. The loan is paid off over a set term, often 15 or 30 years, through regular payments that cover principal and interest. Types of mortgage loans Common types of mortgage loans include: Conventional loans: Offered by banks and other lenders, these are not backed by a government agency and typically have stricter financial requirements. Government-backed loans: These loans are insured by a federal agency, making them an option for borrowers with a lower credit score or smaller down payment. Examples include: FHA loans: Insured by the Federal Housing Administration.