/homes-mooresville/manufactured-homes/In our experience at 1st Choice Home Centers, more and more people are choosing mobile or prefabricated homes, even when buying a home for the first time. Prefab homes are a great choice, as they provide excellent value for their price, and they are compatible with a variety of lifestyles. Even when buying a mobile home, though, you will most likely need to get a mortgage, so we have put together this article to explain how a mortgage works.
What is a Mortgage?
A mortgage is a loan used to finance the purchase of a home. Most people can’t pay the total price of a new home out of pocket, so instead they pay a smaller amount towards the total (usually 10-20% of the full price) and borrow money from a bank or other lender to cover the rest.
How a Mortgage Works
When you take out a mortgage to pay for a home, you will sign an agreement with the bank stipulating the terms of the deal. Your lender will lend you a certain amount, which you will then use to pay for the house, and you will be expected to pay back the loan with interest over time.
Your mortgage agreement will include a term for the loan, such as 20 or 30 years, and you will need to pay back the full amount by the end of that time period. In addition, the home itself will serve as collateral for the loan, meaning that if you fall behind on payments, the lender can take possession of your home.
Our team can help you find the best mortgage terms for your needs. Contact us today to learn more.