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A mortgage is a type of loan designed for buying a home. Mortgage loans allow buyers to break up their payments over a set number of years, paying an agreed amount of interest. Mortgages are also legal documents that allow the mortgage holder to claim the property if the buyer doesn’t make their payments. It also protects the buyer by forbidding the mortgage holder from taking the property while regular payments are being made. In this way, mortgages protect both the mortgage holder and the buyer.

These are loans that ultimately are bought by Fannie Mae or Freddie Mac, the big investors that play an important role in the lending market.

A fixed-rate mortgage has an interest rate that doesn’t change throughout the life of the loan. In that way, borrowers are not exposed to rate fluctuations. For example, if you have a fixed-rate mortgage with a 4.5 percent interest rate and prevailing rates shoot up to 6 percent the next week, year or decade, your interest rate is locked in, so you don’t ever have to worry about paying more. Of course if rates fall, you’ll be stuck with your higher rate. Keep in mind, fixed-rate only refers to the rates, but there are many types of fixed-rate mortgages, such as 15-year fixed rate, jumbo fixed-rate and 30-year fixed rate mortgages

Adjustable-rate mortgages, or ARMs, have an initial fixed-rate period during which the interest rate doesn't change, followed by a longer period during which the rate may change at preset intervals. Unlike a fixed-rate mortgage, ARMs are affected by market fluctuationss. So if rates drop, your mortgage payments will drop. However, the reverse is also true — when rates rise, your monthly payments will also rise. Generally, interest rates are lower to start than with fixed-rate mortgages, but since they’re not locked in to a set rate, you won't be able to predict future monthly payments. ARMs come with an interest rate cap above which your loan can not rise.

FHA loans, VA loans, USDA loans
Government-insured or government-backed loans are backed by three agencies: the Federal Housing Administration (FHA loans), the U.S. Department of Agriculture (USDA loans) and the U.S. Department of Veterans Affairs (VA loans). The U.S. government isn’t a mortgage lender, but it sets the basic guidelines for each loan type offered through private lenders. Government-backed loans can be good options for first-time homebuyers as well as folks who have a lower down payment or smaller budget. The requirements are usually looser than those for mortgages not secured by the government. These are known as conventional mortgages. The interest rates on FHA, VA and USDA loans are similar to conventional mortgages, but fees and other costs are higher.

It is important to prepare for the mortgage application process to ensure you get the best rate and monthly payments within your budget.

Here are quick steps to prepare for a mortgage:

Build your credit
Set a limit on what you can afford
Set savings aside for both down payment and expected monthly payments
Research the best type of mortgage for you
Get preapproved
See multiple houses within your budget
Apply for a mortgage loan
Get approved!
Close on your new house

The amount you can borrow depends on a variety of factors, including how much you’re qualified for (depending on your income, among other factors) as well as what type of loan you have. Conforming mortgages have limits while jumbo loans allow borrowers to exceed those limits.

Quality credit cards aren't exclusive to people with excellent credit scores. Many credit cards for good credit are realistically within reach for someone with a 670 FICO Score, and the field isn't limited to no-frills cards. Depending on your credit score, annual income and other factors, you could qualify for a cash back, travel or rewards credit card that offers solid value and benefits.

When shopping for a credit card, look for each card's recommended credit score. You can also check for pre-qualified credit card offers to judge your odds of approval without the short-term dip in your credit score that accompanies a hard credit inquiry.

Most consumers probably have a “go-to” card that they use for everyday purchases, and for some of them that single card might be enough. However, you might benefit from an additional card if you:

Travel frequently. A general-purpose travel miles card or a co-branded hotel or airline card can partially offset the costs of airfare, lodging and other travel expenses.
Own a small business. Business credit cards have targeted rewards programs, business-specific benefits and higher credit limits than consumer cards.
Have the potential to earn cash back in specific categories. One example is a parent who could use a “designated supermarket card” that earns elevated cash back rates on grocery store purchases.
Want a card upgrade. You might find a new card that’s a step up from your current go-to card. In that case, you could keep the old card active and use it for a small, recurring expense (auto-paying for cloud storage or a streaming subscription, for example).
Although Experian estimates that the average American has four cards, the number of credit cards you should have depends entirely on your unique situation.

Having multiple cards is fine as long as it conclusively delivers benefits that you can use (miles, cash back, perks and so on). Just beware of burdening yourself with annual fees and hurting your credit score with excessive applications.

Points, miles and cash back are all forms of credit card rewards. Cash back is the simplest and most flexible type of rewards. Each eligible purchase you make earns a set rate of "cash," which can often be redeemed as a bank account deposit, statement credit or check. Points are usually earned by travel rewards cards and can then be redeemed for flights, hotel stays and more. Credit card miles can be redeemed for flights with a particular airline.

The more creditworthy you are, the better your chances of meeting an issuer’s requirements. Issuers determine which credit cards you qualify for based on your creditworthiness — primarily your credit score. Top-tier credit cards generally require credit scores in the Good to Excellent range, measured by the FICO scoring model as 670-850.

A credit card application could have a negative (but temporary and relatively small) effect on your credit score. Getting approved for a credit card or other type of credit account requires some scrutiny of your track record as a borrower. The process can involve two types of credit checks:

A “hard” inquiry, when the lender pulls your credit report to make a decision about whether to lend to you.
A “soft” inquiry, when the lender checks your credit as part of a preliminary screening. Pre-qualified credit card offers involve soft credit inquiries, so keep an eye out for cards that offer pre-qualification.
A hard inquiry can subtract a few points from your credit score temporarily, while a soft inquiry usually has no effect. You’ll want to limit the number of hard inquiries on your credit report, so be as selective as possible about which credit cards you apply for.