What does the lender receive in a typical first mortgage?

In a typical first mortgage, the lender receives a conveyance of the property in the sense that they obtain a lien on the property, which serves as security for the loan. This means that if the borrower defaults on the mortgage, the lender has the right to foreclose on the property to recover the outstanding balance of the loan. The first mortgage creates a legal claim against the property that ensures the lender's interest is protected.

While the lender does not take ownership of the property outright, the lien created by the mortgage gives them significant rights relating to the property as collateral. The borrower retains ownership and the right to occupy the property, but the lender's claim takes precedence, establishing them as the primary creditor in the event of default. Thus, the key element in a first mortgage is that the lender's interest is secured through a lien on the property, which is essential for their confidence in providing the loan.

The other choices do not accurately reflect the nature of a lender's rights in a first mortgage. The lender does not receive an interest in the equity directly; rather, they hold a claim against the property itself. A license to occupy is typically granted to the homeowner, not the lender. Finally, an option to purchase would imply a right