Most Americans dream of homeownership, and many of them eventually achieve it. Doing so is often the biggest single financial transaction of a person’s life, and the benefits are enormous in terms of generating wealth and monetary stability throughout their adult life. Still, this only happens after someone understands what a mortgage is. Mortgages are loans that let you own a home. More specifically, they let a lender, such as a bank or other financial institution, own your home while you live in it and make payments to them. Once the mortgage is paid off, you would then own your home. There are three components to mortgages, and understanding each is crucial considering that many mortgages last 30 years. They might last even longer if one refinances.