When you are looking to buy a home, you need to find a way to pay for the whole thing. And there are those rare cases where someone can pay the entire cost of a home upfront. But in the vast majority of cases, whether you are buying a home for $100,000 or $1 million, you will be paying part of the money up front and the rest will come through a mortgage. So what is a mortgage and how does the whole process work? We can take a look at physician mortgage loans and all types of mortgages in more detail.
A mortgage is another word for a loan that you are taking to pay for the home that you intend to buy. When you get your mortgage approved, you will have all the money that you need to make a final bid on the home, and then you will have to sign all the papers to get the house deed. And with the mortgage itself, you will have to make monthly or annual payments to satisfy the terms of the mortgage. These payments go towards the principal amount you borrowed and the interest on the loan.
Depending on the type of mortgage you are getting, you will either get a mortgage with a fixed or variable interest rate. In most cases, a fixed rate is what you want if you intend to own the property for the long run. But if you are someone who is interested in owning the property for a few years and then selling – either because you will move or because you will invest in a new property – then you may want a variable interest rate. It will be lower for the first few years, and you will have sold by the time the rate is due to go up.