Home Finance Basics
Purchasing a home is a major commitment. The median cost of homes in the United States now exceeds $300,000. Unless you can come up with that kind of cash, you must borrow to finance a house. The kind of loan you need is called a mortgage.
A mortgage payment includes several items. The principal is the money you borrow. The mortgage payment also includes interest. Interest is the cost of borrowing money. In addition, lenders require you to take out home insurance and pay the property taxes on the home.