A real estate loan (also known as a home mortgage) is comprised of the money that you borrow from someone (typically a financial institution, i.e. a mortgage lender) for the purpose of buying a real estate property. The real estate loan generally covers a part of your purchase price and the remaining portion has to be paid by you upfront i.e. as down payment. The amount (i.e. the percentage of total purchase price) that you have to pay as down payment is dependent on a number of factors and you can generally reduce it to even 5% by going for home mortgage insurance.
Also, there are various types of real estate loans, including fixed interest rate home loans and adjustable interest rate home loans. So depending on what type of real estate loan you have gone for, your monthly payments might either remain constant (fixed rate) for the full tenure of the loan or keep getting adjusted periodically (adjustable rate) on the basis of a financial index. Besides that, some other costs are also associated with real estate loans e.g. there are closing costs, inspection costs, attorney fee etc.
Also, in case the property needs some repairs, there will be costs associated with that too. Again, there is stamp duty and other taxes that you need to pay. So, you need to understand the concept of real estate loans and the related costs clearly before you actually apply for the real estate loan. And understanding these concepts is really not that tough.
