What Is a Mortgage?

A mortgage is a loan used to buy or maintain a home, land, or another sort of real estate. The borrower promises to repay the lender over time, often in a series of monthly payments divided into principal and interest. The property acts as collateral for the loan. A borrower must apply for a mortgage through their preferred lender and fulfill specific criteria, including minimum credit scores and down payments. Before they reach the closing stage, mortgage applications are subject to a stringent underwriting procedure. Mortgage kinds differ depending on the borrower’s demands, such as conventional and fixed-rate loans.