When considering the purchase of a home there are many things you want to take into account. However, 3 things will make a big difference in your ability to repay the loan and avoid foreclosure are the term, rate and cost of the mortgage. Here is a little about each of these important aspects of a mortgage.

The term of a mortgage is the amount of time you have to pay it off. This varies from 10 to 30 years and the longer your term, the lower your payments. Something to keep in mind though is the shorter your term, the less you’ll pay in interest usually. Generally, shorter terms have lower interest rates to start with and you’ll be making fewer payments, which will save you money in the long run.

The rate is your interest rate. Just like any other interest rate it is the amount of money you have to pay your lender to borrow the needed funds. This rate is dependant upon many variables such as your credit score, down payment, income and the value of the home you are buying.

Finally the cost of a mortgage means the closing costs. These usually include an appraisal, recording fees, and attorney or notary fees. Make sure that your lender doesn’t sneak an unnecessary fee into there.

Buying a home can seem like a daunting task, but this basic knowledge can get you started in the right direction.