Mortgage

Banking & Credit

A mortgage is a secured loan to purchase real estate, with the property serving as collateral. Standard US mortgages run 15 or 30 years at fixed or adjustable rates. Required components (PITI): Principal (loan amount reduction), Interest (lender cost), Taxes (property tax escrow), Insurance (homeowner's + PMI if down payment under 20%). The borrower's qualifications include credit score (740+ for best rates), debt-to-income (under 43% back-end), down payment (typically 3-20%), and stable income history. Mortgages are among the cheapest forms of consumer debt because they're secured and long-term — making them an effective inflation hedge.