What Is A Mortgage, Anyway?

A mortgage is a loan secured by real estate. In exchange for lending you the funds necessary to purchase a home, a lender receives your promise to repay the loan over a specific period at a specific cost. Your home and the land it sits on serve as collateral for the loan. Should you default, or stop making payments on the loan, the lender has the right to foreclose on the property and use the proceeds from the sale to recover the remaining amount owed.