Home Purchase Loans


Buying property, which may be accomplished with a combination of a mortgage and down payment.

Quick Summary

It's time to make the big leap: Buying a home means many things, including a willingness to settle in one spot, an inclination to invest in property – and the ability to handle what is probably the biggest debt of your life. Out of all the elements that contribute to your home purchase, the mortgage is one of the most important. This home loan represents the money you need to borrow to buy the house, while the down payment represents the amount of cash you pay immediately. There are mortgages available for both high and low down payments, giving you many options to find a loan that's just right for your current financial situation – and we'll help you shop for options.

Pros and Cons


-Build good credit. A mortgage is a strong choice for building good credit over the long term, especially if you don't have much of a credit history.

-Build equity. This is an often-lauded advantage of a mortgage, but still holds true today: Your mortgage payments help build your own home equity, increasing your net worth and allowing you to sell the property for additional funds in the future.


-A long-term commitment. A mortgage usually commits you to a particular debt and location for at least several years. That can mean giving up a certain amount of flexibility in your life.

-Can be more expensive. Mortgage payments may be more expensive than alternatives like renting, and initial mortgage costs can cut into your cash reserves.

-Can be difficult to get for first-time homebuyers. If you lack a credit history or have poor credit, getting the right mortgage can be challenging – although options like FHA loans and co-signing can help.

What Else Should I Know?

Loan preapproval and approval can both be accomplished before you make an offer on a house. These are limited-time, conditional statements made by lenders about how much they are willing to lend you – and both can help your home search. For one, this gives you a very useful ballpark figure for "how much home you can afford" and how high you can go with first offers or counteroffers. Second, sellers like to see that buyers have been approved for a loan, because that means there's less chance of the deal falling through: You may be able to reach an agreement more quickly (and for a lower amount).