A mortgage is a loan used to purchase a home, where the property itself serves as collateral. Over time, you repay the loan with interest through monthly payments.

Affordability depends on factors like your income, existing debts, credit score, and down payment. It's essential to evaluate your financial situation to determine a comfortable mortgage amount.

Pre-qualification provides an estimate of how much you might borrow, while pre-approval involves a more in-depth review of your finances, giving you a conditional commitment from a lender.

Down payment requirements vary by loan type. Conventional loans often require 5–20%, but some programs allow for as little as 3% down.

Common options include fixed-rate mortgages, adjustable-rate mortgages (ARMs), FHA loans, VA loans, and USDA loans, each with unique features and eligibility criteria.

PMI is insurance that protects the lender if you default on your loan. It's typically required if your down payment is less than 20%.

Closing costs encompass fees for services like appraisals, title searches, and loan origination. They usually range from 2% to 5% of the home's purchase price.

A higher credit score can lead to better loan terms and interest rates. Lenders use your credit score to assess your creditworthiness.

Some mortgages have prepayment penalties, while others don't. It's important to check your loan agreement to understand any potential fees.

An escrow account is used to hold funds for property taxes and homeowners insurance, ensuring these bills are paid on time.