Because lenders want to help everyone achieve the American dream, there is private mortgage insurance. PMI is purchased by the borrower and ensures the lender against default. Usually the premium on the mortgage insurance is added to the monthly note. For example, McClung said Planters Bank sends a reminder letter as the PMI cutoff point is approaching, but the borrower must confirm in writing that PMI is to be stopped. The selection determines how much total interest you will pay.
Amortization means that the loan is paid slowly, over time.
The longer the term, though, the smaller the equity when you sell the house. Your equity The equity in a property is the difference between its current value and the outstanding mortgage. With a shorter loan period, the principal is reduced faster so the amount of equity is greater. Note, these figures are used for illustration only and do not necessarily represent potential gains. Decisions have to made on how much you want to get out of the house when you sell it and how much you can afford to pay in monthly notes while you're living in it.