Many Americans want to live their lives according to what's known as the American dream - graduate school, get a good job, maybe get married and start a family. Another item at the top of the list is buying a home.

If you 're just starting out, you may not have the money for a house right away. This is where home mortgages come in. A mortgage is a loan from a lender that that is secured by a piece of property, often a house, that can be paid off over a number of years.

It can seem complicated to obtain a mortgage loan and buy a house because of all the different lenders and their various policies. However, most mortgages are are quite similar, and once you learn the basics, you can obtain a mortgage yourself without too much confusion.

Because of the high cost of housing, most people won't have the cash up front to purchase that first house. Residential residences can range from $100,000 to $1,000,000 and more. That's why most folks will borrow the money in the form of a mortgage from a bank or mortgage company.

Just about all mortgage loans have four items in common: down payment, terms, payment amount, and interest. The down payment is the amount of money that you have to pay to the lender when you first receive the loan to buy the house. This is usually a percentage of the total mortgage amount - often 5%. For a $300,000 mortgage, you would be expected to put down $15,000.

The terms are generally the amount of time you will take to repay the loan. The usual terms are 15 or 30 years of monthly payments.

The payment amount is determined by the length of the terms, the total amount of the loan, and the interest rate. The interest rate for the last few years has been between 5 to 7 percent. Always shop around for the lowest interest rate you can find as this will result in lower monthly payments and less money you have to pay out over the life of the loan.

On a 30 year loan for $150,000 at these interest rates, you could expect to pay about $417 or so a month for those 30 years to pay off the mortgage. This amount will of course vary according to how good of a deal you can get.

One other item to mention is points. Points are an upfront charge by the bank or mortgage company to pay for the processing of the loan and any other charges that they may dream up. Usually points are 1 or 2 percent of the loan.

Some lenders will include the points charges into the body of the loan so you can pay it off with the monthly payment and others won't. That's why is it important to shop around and speak to multiple lenders to get the best combination of terms, interest, points, and down payment amount.

Although most mortgages have these different aspects in common, the company you deal with can make a big difference in the satisfaction you realize and the total amount of money you have to pay out over the life of the loan. Visit at least 5 lenders before committing yourself to a certain mortgage and compare their options against the others. It can save you thousands of dollars over the years to come.