In banking terminology, the term Mortgage refers to a debt collateralized by specific real estate that the borrower must pay back over a period of time by making pre-specified payments. Also known as a Mortgage Loan.
For example, a Mortgage is typically used by people and businesses to buy real estate without having to pay the whole amount required at the outset. Most first time home buyers will put together a down payment and then take out a Mortgage loan secured against the house they are buying via a Mortgage note to pay off the remaining balance over time. Mortgage loans secured on real estate are usually long term debt agreements, often running over a period of ten, fifteen, twenty or even thirty years, and they usually involve the debtor making payments on a monthly basis. Common types of mortgages include fixed rate, adjustable rate, interest only and balloon loans.