October 1, 2014 – Word of the Day:  mortgage

Most people in the United States take out a mortgage when they buy a house. This is a special loan for a house or a condominium (or a place where a person might live). The most common type of mortgage takes 30 years to pay back, but some people choose 15-year loans. The word "mortgage" is usually a noun:

• Fred got a good interest rate on a mortgage for his house.
• Right now, you can get a 30-year mortgage at an interest rate of 4.5%. That’s very good.
• We have a 15-year mortgage on our house.
• Cathy got her mortgage through a broker.*
• John and Jill finally paid off their mortgage. Now they own their house free and clear.
• It’s not that hard to get a mortgage for a house. If you have a job, good credit, and a little money saved, you can probably get a mortgage.

I always tell my students (the ones who I see every day in class) that if they’re going to stay in the United States, they should think about getting a house. That almost always means they need a mortgage to buy the house. The reason I recommend this is because it’s usually much better to have a house that you own when you get older than not to have one. If you rent an apartment or a house, the money you pay in rent goes to someone else. If you own a house, you can sell it in the future and keep the money for yourself.

*broker: a person who helps a borrower get a loan for a house. This person is also referred to as a mortgage broker.

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