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Serving Southlake, TX

Brushing Up on Mortgage Basics

mortgage rates Southlake TXBefore buying a home, you will need to be approved for a mortgage. Your Southlake realtor may recommend that you learn the basic terminology associated with mortgages before signing the paperwork. For example, a mortgage for buying a home involves collateral, which is the house itself. The principal on the mortgage is the total amount of the money you're borrowing for buying a home. You can decrease the principal you owe by paying a larger down payment, or the initial sum of money you put toward your home's purchase price. Although a standard down payment is 20 percent of the home's purchase price, making a larger down payment will decrease the amount you'll pay in interest for the mortgage.

In addition to your mortgage payments, you can expect to pay property taxes. Your property taxes are determined based on the assessed value of your home. Your property taxes go toward the upkeep of the community, such as schools and roads. As your realtors can tell you, you'll also purchase homeowners insurance, which protects your property in the event of losses from natural disasters or other events.