Whats a mortgage, and how do you avoid it?

Question

If you buy a house, people say be aware of the mortgage, whats that?

Answer 1

when people say beware of the mortgage, just be carefule the type of mortgage you sign up for.  particulary in the past 6-7 years, banks/lenders developed all these creative mortgages where more people could afford a large mortgage to get into a home. In these types and depending on what payment option you chose, you're essentially just paying interest, sometimes not even.  And the principal doesn't move.  And when rates go up, these mortgages allow the payments to stay the same and any back interest gets tacked onto your principal balance.  So your bill increases.  And when the value of your home decreases, then you can get into some deep mess.  I can go on and on explaining how this all happens but I just don't have that kind of time.  It may seem confusing but in the end, these mortgages are dangerous if you're not on top of it and they can lead you to a heep of problems.  

Go for a conventional mortgage with a fixed rate that you can afford, you'll be fine. Or if you have the cash, pay cash.

Answer 2

A mortage is a document that gives the guy who lent you the money to buy the house, the right to take your hourse if you fail to pay back the loan.

A lot of people think it's a loan, but it's not. A loan is a loan. A mortgage is an agreement that protects the lender incase you don't pay up.

There are a lot of ways to avoid it.

You can pay for the house in cash instead of taking out a loan.

You can ask someone to give or lend you the money to buy the house without a mortgage agreement. Usually the only people who would agree to this are rich relatives and stupid people.

Answer 3

The difference between rent and mortgage: when you rent, you never see that money again. When you buy a house, you pay a mortgage (mort, a french word meaning death, thus you pay till death, in a manner) but when the morgage is fully paid (after 20 years or whatever) then the house is yours.

Answer 4

A Mortgage is the loan of money from a lending institution (ie: bank) that you will get to buy a home.

There is really no way to avoid a mortgage unless you have half a million dollars to begin with.

When people state to beware of the mortgage, they are meaning that you should get all the information on payments, fees, intrerest rates, and what you will pay through out the life of the mortgage. You also want to check that your purchase will be worth the cost of the mortgage. Another great ideal is to "shop around" for the best mortgage rate; this will allow you to get the best bang for the buck.  

Answer 5

It's the loan you take to buy it.  There are many different types of loans, and many different rates.  What people are saying is to be careful to get the best terms and rates possible.

You only can avoid a mortgage by paying cash for the house, or not buying one in the first place.