In real estate finance, a mortgage is the legal instrument by which real property is pledged, or hypothecated, as security for the repayment of a loan. It creates a lien on the property in favor of the lender while allowing the borrower to retain possession and use of the property.
If the borrower fails to meet the obligations of the loan, the mortgage gives the lender the right to seek repayment through foreclosure or other legal remedies. Mortgages are a fundamental component of real estate transactions and are commonly used to finance the purchase, construction, or refinancing of property.
