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Unless you were a teen golf prodigy or are the offspring of uber rich and very generous parents, you’re likely to need to take out a mortgage in order to buy your first home. A mortgage lender can lend you much of the money to purchase a property, retaining a claim over it enabling them to take possession of it should the loan and accompanying interest charged not be repaid.
First home buyers are still very active in the property market, despite all the commentary around about house prices being unaffordable. They accounted for a record 26.4% of property purchases in the third quarter of 2021, according to property information firm CoreLogic.
A mortgage will be the biggest investment most people make in their lifetime so it’s important that you as a first home buyer understand how it works.
In simple terms, a mortgage or home loan is a loan you obtain from a lender so that you can purchase a house. The loan is secured against that house and the lender will retain the certificate of title on the house until the loan is fully paid. This protects the lender from your selling the house until the loan is repaid.
