What is a Mortgage?
A mortgage is a debt instrument specific to the real estate industry. It is secured by the collateral of a real estate property. The borrower is obligated to pay back the loan over time. Mortgages make it easier to purchase large real estate properties without having to pay a large purchase price upfront.
The borrower instead gets the opportunity to repay the loan over time – in periodic installments in addition to interest payments. After paying back the loan, the borrower becomes the owner of the property free and clear. Mortgages can also be referred to as liens against property or claims on property.