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Foundations · 1 / 8
How can a family buy a home without having all the money?
How families borrow money to buy a home
1 · Start with the idea
A home can cost much more than a family has saved. One way to buy it is to use some of the family's own money and borrow the rest. The borrowed money must be paid back over time.
2 · Picture it
Imagine a home costs $500,000. A family has $100,000. If someone agrees to lend the other $400,000, the family can buy the home now and repay that borrowed money over many years.
3 · Now learn the English words
loanmoney you borrow and must pay back
mortgage loana loan connected to real property, commonly used to help buy a home
4 · Why this matters
This is the basic idea behind home financing. Only after the idea is clear do we need the professional word.
5 · Check yourself
If a family does not have the full price of a home, what are the two sources of money they may use?
Show answer
Their own money and money they borrow.
Source
StateCourse California Mortgage Loan Brokering & Lending · Lesson 02