A mortgage is a type of loan used to purchase or refinance real estate, such as a house or a piece of land. The borrower (also known as the mortgagor) provides the lender (also known as the mortgagee) with a security interest in the property being purchased or refinanced. This means that if the borrower fails to repay the loan, the lender has the right to foreclose on the property and sell it in order to recoup the amount owed.
Mortgages typically have a fixed or adjustable interest rate and are typically repaid over a period of 15 to 30 years. The amount of the mortgage loan is based on the value of the property being purchased or refinanced, and the borrower’s creditworthiness.
The process of obtaining a mortgage involves submitting an application to a lender, providing documentation of income and assets, and having the property appraised. Once approved, the borrower will receive the funds to purchase or refinance the property, and will be required to make monthly payments until the loan is fully repaid.