Library: Personal Finance Basics

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Personal Finance Basics
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What is a mortgage?

What is a mortgageA mortgage is one of the most fundamental concepts in personal finance.

When you think about it, to buy a home is prohibitively expensive. I mean, who walks around around with $400,000 plus to spend in their bank accounts! Bill Gates aside, how can so many people live in these homes? The answer is a mortgage.

A mortgage is basically a loan by a bank to an individual. But it’s not an ordinary loan; with a mortgage, the bank can use the house as “collateral”. If you can’t make a payment, the bank can seize, or take ownership of your home. As a result they give great rates, and loan large sums of money.

This video will help explain what is a mortgage for you.

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