Mortgage

Mortgage

A loan secured by the collateral of some specified real estate property which obliges the borrower to make a predetermined series of payments.

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mortgage

A pledge of specific property as security for a loan. See also first mortgage, reverse annuity mortgage, second mortgage.

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Mortgage

A loan used to buy real estate. A mortgage is secured by the property it is used to purchase. One must make monthly payments on a mortgage, and there is a set term before full payment is due, often 15, 20, or 30 years. Some mortgages have fixed interest rates, while others have variable interest rates. If one defaults on a mortgage, the bank making it may take possession of the real estate and sell it to recover its investment. Some banks, notably savings and loans, specialize in making mortgage loans. See also: Mortgage-backed security.

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Mortgage. A mortgage, or more precisely a mortgage loan, is a long-term loan used to finance the purchase of real estate.

As the borrower, or mortgager, you repay the lender, or mortgagee, the loan principal plus interest, gradually building your equity in the property.

The interest may be calculated at either a fixed or variable rate, and the term of the loan is typically between 10 and 30 years.

While the mortgage is in force, you have the use of the property, but not the title to it. When the loan is repaid in full, the property is yours. But if you default, or fail to repay the loan, the mortgagee may exercise its lien on the property and take possession of it.