October 23, 2008

What is Mortgage?

It is a type of using real properties and personal properties as a security for the payment of a debt. But mortgage in it self is not a debt, it is only an evidence of debt. We can also say that the mortgage is a security for the loan that the lender makes to the borrower.

A mortgage loan is a loan secured by real property through the use of a mortgage of a legal instrument. In many places it’s strongly associated with loans only secured on real state not for other properties. For some places the land may be only mortgaged.

In other words we can say that it’s a standard method by which individuals and businesses can purchase residential and commercial real estate without the need to pay the full value immediately.