28th Nov 2009 by Tobias John Sterling
Strictly speaking, a 'mortgage' is not a type of loan, but rather an encumbrance placed on a piece of real property that is acting as security (that is, collateral) for a loan. However, in common parlance it's normal to use 'mortgage' to mean 'a loan to buy property which then acts as security for the loan.' The loan that is secured by the property is typically paid back in installments, often over a long period of time (such as 20 or 30 years). If a borrower defaults on making repayments on the loan, then the mortgage may give the lender the right to repossess the property and potentially sell it in order to recover the amount of the loan.
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