Do you really know what a mortgage is? When you google a mortgage the first link contains the definition. It reads “the charging of real property by a debtor to a creditor as security for a debt, on the condition that it shall be returned on payment of the debt within a certain period.” At first glance I saw that a mortgage is mostly about debt, the bank or lender wants insurance that they will get their money back. Makes sense, right?

Well then why do mortgages have different interest rates? Interest rates are based on credit. Credit is defined as “the trust which allows one party to provide money or resources to another party where that second party does not reimburse the first party immediately, but instead arranges either to repay or return those resources at a later date.” Credit fluctuates almost constantly, one can build their credit in several simple ways:

1) request a credit report to know your jumping off point

2) open a bank account

3) make sure to pay all your bills in a timely fashion

4) get a retail, secure, or personal credit card

5) get a small loan that you can pay back monthly