word "mortgage" wey, it very simply is a conditional pledge in which the property (and its profits) remain in possession of the debtor during the loan’s repayment. A mortgage given as a loan to finance the purchase of a property based on land and a structure(s) attached to the property. A mortgage uses the collateral (house and land) to secure the loan or to ensure you pay the lender their money back. When you agree to a mortgage, you’re signing a legal contract promising to repay the loan plus interest and other costs. The land and structures on the land are collateral for that loan.
If you don’t repay the debt, the lender has the right to take back the property and sell it to cover the debt, a process known as foreclosure. This is a legal action taken to assign title to the property to the party holding the collateral as a guarantee of payment on a loan.
The principal is the sum of money you borrowed to buy your home. Interest is what the lender charges you to use the money you borrowed. the lender could also charge you points and additional loan costs. Each point is one percent of the financed amount and is financed along with the principal.
Principal and interest monthly payments are computed in a process called amortization, which reduces your debt over a fixed period of time. With amortization, your monthly payments go toward paying off the interest in the early years, and gradually reduce the principal later on.