Mortgage refers to a type of loan that is used to finance the purchase of real estate, such as a house or a property. It is a legal agreement between a borrower and a lender, typically a bank or a financial institution. The borrower receives funds to purchase the property, and in exchange, the lender holds a lien on the property as collateral until the loan is fully repaid.
When you obtain a mortgage, you agree to make regular payments, usually on a monthly basis, over a specified period of time, known as the loan term. The payments typically include both the principal amount borrowed and the interest charged on the loan. The interest rate can be fixed or adjustable, depending on the terms of the mortgage.
Mortgages are usually long-term loans, with common loan terms ranging from 15 to 30 years. The amount you can borrow and the terms of the mortgage depend on various factors, including your income, credit history, the value of the property, and the current market conditions.
If you fail to make the mortgage payments as agreed, the lender has the right to foreclose on the property, which means they can take possession and sell it to recover their investment.
It’s worth noting that mortgage regulations and practices can vary between countries, so it’s important to consult with local experts or financial institutions for specific details relevant to your location.