What is a mortgage?

A mortgage is a loan that is secured by real property. A borrower acquires a loan and provides a security interest in the real property owned by the borrower to be purchased with the borrowed funds. This is a common method of using equity or ones ownership interest in real property to obtain funds for other purposes.

Note: The real property may serve as a security interest for more than one loan. If so, this brings up the issue of priority of the security interest, which is discussed further below.