21st Nov 2009 by cocacolabuffet
The most common way to finance a house purchase is by taking a mortgage loan. Financial institutions such as banks, credit unions, mortgage companies are examples of the most common lenders. Most lenders require 20% of the price of the house as downpayment. Currently, Federal Housing Administration and other financing programs made available by the government allows 3.5% downpayment for qualified buyers. The loan amount is charged an interest rate, e.g. 5% of the remaining loan balance per annum.
The rest of loan amount is paid in periodic payments called mortgage payments or instalments. The payment will include interest payment and payment toward the principal balance. Generally, the payment is made monthly.
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