Explore the Mortgage101 Library
Check Local Mortgage Rates
Loan Program Choices
Use our calculator to find out your estimated monthly payment in advance: Enter the loan amount, interest rate, and length of mortgage.
Try our Mortgage Payment Calculator
There are many types of credit available to help you finance a purchase. When you buy a car, you use a secured loan with the car as collateral. A mortgage is another type of secured loan. You can often get an unsecured loan for a purchase. There is no collateral on this kind of loan. Credit cards are another type of credit. The interest rate you pay on any type of credit you obtain depends on your financial strength, and whether or not you supply any collateral.
Secured loans are installment loans that you pay monthly. Homes, cars, stocks and other assets are widely accepted as collateral by lenders. The rate you pay depends on the loan-to-value ratio and the strength of your income and credit history.
If you do not have collateral, you can use an unsecured loan for your purchase. This loan is only guaranteed by your signature, which usually means your interest rate is higher since the lender has no assets backing the loan. You must have good credit and strong employment to qualify for an unsecured loan.
Most credit cards are unsecured types of credit, which is why many carry a high interest rate. The credit card issuer covers their risk with the higher rate.
- 3 Factors that Can Negatively Affect Your Mortgage Application
- FHA Eligibility with Bankruptcy and Foreclosure
- Second Mortgages: Advantages and Disadvantages
- Should You Refinance? Make Sure the Timing is Right
- Short Selling a Rental Property
- What Lenders Don't Reveal About Home Equity Loans
- 3 Common Short Sale Mistakes
- 3 Warning Signs of Loan Modification Scams
- Alternatives to Getting a 2nd Mortgage