A mortgage is debt instrument, with specified real estate property held as collateral for the debt. The borrower agrees to pay back the debt with a predetermined set of payments. A mortgage allows the borrower to use the lender’s money for various purposes. Most commonly, a mortgage would be used to help purchase real estate. However, individuals and companies can mortgage property that is already owned and use the funds for other purposes. Some common examples would include investments, travel, education, renovations or business ventures. Over a period time, the borrower would repay the loan, plus interest, until it is eventually paid in full as agreed. If the borrower stops paying the mortgage, the lender can foreclose on the collateral.
What does “mortgage” mean?
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