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Finding your dream house is a hard enough job, figuring out how to pay for it is another story. The majority of people in the world do not have the cash to pay for a house by simply writing a check, but fortunately there are many lending institution that can facilitate a mortgage loan for you.

A mortgage is usually secured by the real property being purchased and sometimes through personal property. The amount of financing you can get through a mortgage loan depends on the nature and quality of the property and also on your qualifications of repayment. The size, maturity, interest rate and manner of repaying the loan can vary with the nature of loan.

Mortgage loans are often long term loans and the periodic payments for which are similar to an annuity and calculated according to the time value of money formula. Mortgages have a variable interest rate and are scheduled to amortize over a set period of time; typically 30 years. The most basic arrangement would require a fixed monthly payment over a period of ten to thirty years, depending on local conditions.

Over this period the principal component of the loan (the original loan) along with interest would be slowly paid down through amortization.

The two basic types of amortized loans are the fixed rate mortgage (FRM) and adjustable rate mortgage (ARM). ARM is also known as a floating rate or variable rate mortgage. Combinations of fixed and floating rate are also common, whereby a mortgage loan will have a fixed rate for some period, and vary after the end of that period.

Depending on your convenience you can choose the kind of loan you should apply for. There are many categories of mortgage loans: Assumed mortgage, Balloon mortgage, Equity loan, Flexible mortgage, Participation mortgage, Reverse mortgage, Repayment mortgage, Seasoned mortgage etc.

You can get a mortgage from a number of government and private financial institutions. Many even have online components or partners which will allow you apply and prequalify before even stepping ingot a bank.