which statement is true of both mortgages and auto loans

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<h2>Delving Deeper: Additional Similarities and Differences</h2>
The loan term, or the length of time over which you repay a loan, is a crucial factor that significantly impacts your overall borrowing costs.  Mortgages and auto loans typically have distinct repayment terms, reflecting the nature of the underlying asset and the expected lifespan of the loan.


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Mortgages typically have longer terms, ranging from 15 to 30 years. This extended repayment timeframe allows for smaller monthly payments, making homeownership more accessible to a broader range of individuals. However, it also means that you will pay more interest over the life of the loan.
While mortgages and auto loans share many similarities in terms of their basic structure and functionalities, there are also some notable differences that set them apart.
<h3>The Different Types of Mortgages</h3>
Mortgages are a type of secured loan specifically designed to finance the purchase of a home.  The home itself serves as collateral for the loan, meaning that if the borrower defaults on payments, the lender can foreclose on the property and seize it to recover their losses.  This inherent security makes mortgages relatively lower risk for lenders, often resulting in lower interest rates compared to unsecured loans.
Both mortgages and auto loans typically require a down payment, which is a portion of the purchase price that you pay upfront.  The required down payment percentage varies depending on the type of loan, the lender's policies, and your individual creditworthiness.