I'm looking to get a house and lot through a broker, and I'm told financing will be through a bank loan. I was told to open a checking account. How does a bank loan work when buying a property?
user
Sure, let's break this down!   So the bank will issue a loan to you, and it will usually be secured by a mortgage on the property.   That means that, if you don't pay the bank back, the bank can foreclose on the property and sell it.  That's basically what a "mortgage" is.
assistant
Thanks. But, why a checking account? Why not a normal savings account?
user
That sounds reasonable!  To make a payment to the bank for the loan, you can either withdraw cash from your checking account or you can write a check and deposit the check into your checking account.  That check goes to the bank, and they'll add the payment to the loan account.  A savings account doesn't have those options -- it can't be written into.
assistant
I'm looking to get a house and lot through a broker, and I'm told financing will be through a bank loan. I was told to open a checking account. How does a bank loan work when buying a property?
user
Sure, let's break this down!   So the bank will issue a loan to you, and it will usually be secured by a mortgage on the property.   That means that, if you don't pay the bank back, the bank can foreclose on the property and sell it.  That's basically what a "mortgage" is.
assistant
Thanks. But, why a checking account? Why not a normal savings account?
user
That's a great question.  The reason you're told to get a checking account, is so that you can write checks for things, and get bills and statements sent to you there, to keep things separate from your savings.
assistant
I'm looking to get a house and lot through a broker, and I'm told financing will be through a bank loan. I was told to open a checking account. How does a bank loan work when buying a property?