How is a mortgage best defined?

A mortgage is best defined as a loan secured by collateral property. This means that when a borrower takes out a mortgage, they are receiving funds to purchase real estate, and in return, the property serves as collateral for the loan. If the borrower defaults on the loan, the lender has the right to take possession of the property through foreclosure to recover the outstanding balance of the loan.

This definition captures the essence of how mortgages operate in real estate transactions, positioning them as critical financial instruments that allow individuals to acquire property while spreading out the cost over time. Understanding this foundational concept is essential for navigating any discussions or transactions related to real estate loans and property ownership.