by 
The Curious Bag
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A mortgage is an expensive endeavor and should not be procured lightly. According to the Federal Reserve, the average mortgage's closing costs ranges from 3 to 6 percent of the loan amount.
Significance
A mortgage allows a borrower to purchase a home that he would not be able to pay for in full at the time of purchase. It gives many the method in which to make their dream of home ownership come true.
Function
A home mortgage can also be used to pay off or consolidate other debts, in the event of a cash out refinance or a home equity line of credit.
Time Frame
Mortgages range from 10 to 40 years in term length and can have variable or fixed interest rates.
Considerations
While the mortgage allows a borrower to purchase a home she could not afford out right, it does greatly increase the cost of the home due to the interest expense over several decades.
Misconceptions
Even if a borrower sells his home for more than he paid for it, the profit is not as much as simply subtracting the sales price from the purchase price. The interest expense must be deducted from the profit to determine the real profit from the sale.
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