What is a Mortgage?

A mortgage is a debt instrument typically used as a finance mechanism to purchase real estate. When purchasing a piece of property or a home, new owners typically do not purchase the entire piece of real estate up front.

As a mechanism to make a claim on the property while agreement to a set arrangements of payments to purchase it, a mortgage can be initiated. Over a period of several years, the borrower repays the loan, plus interest, until he/she eventually owns the property free and clear.

Mortgages are also known as "liens against property" or "claims on property."

What is Mortgage Refinancing?
What is a Home Mortgage?
What is Mortgage Insurance?