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What is a mortgage?

Updated: 9/11/2023
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10y ago

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mort·gage

n.

1. A temporary, conditional pledge of real property to a creditor as security for performance of an obligation or repayment of a debt.

2. A contract or deed specifying the terms of a mortgage.

3. The claim of a mortgagee upon mortgaged property.

tr.v., -gaged, -gag·ing, -gag·es.

1. To pledge or convey (property) by means of a mortgage.

Source: Answers.com

In popular, non-legal terminology, people often refer to getting or having a mortgage. What they probably mean is that they have obtained a loan to fund the purchase of real property. Lenders of such loans require that the lender receive a security interest in the real property as protection against a default or non-payment. A properly drafted mortgage grants the lender the power to take possession of and sell the property if the loan isn't paid.

In the case of "mortgages," we are really dealing with two different things when we speak about "a mortgage." Most people actually use "mortgage" incorrectly. They use "mortgage" when they are really referring to a loan secured by a mortgageinterest. The mortgage, however is not the loan itself; the mortgage is the security interest in the real estate that the lender obtains from the borrower.

A mortgage is a conveyance of title to real property as security for a debt. The mortgage can create a conditional conveyance of real property or it can create a lien depending on state laws.

In title theory states the mortgage transfers title to the property to the lender until the debt is paid. A release of the mortgage transfers the title back to the mortgagor. In a lien theory state the mortgage creates a lien on the property that is released when the mortgage is released.

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A mortgage is a loan to finance the purchase of your home. This is likely the largest debt you'll ever take on.

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