What is a mortgage?

A mortgage is defined as a loan specifically used to purchase real estate, where the property itself serves as collateral for the loan. This means that the lender has a security interest in the property until the borrower completely repays the loan. If the borrower defaults on the mortgage, the lender has the right to foreclose on the property, which allows them to recover the remaining loan balance by selling the property.

This definition highlights the essential characteristics of a mortgage, including its purpose (to finance the purchase of real estate) and its protective mechanism (the property as collateral). Mortgages play a fundamental role in real estate transactions by enabling individuals and businesses to finance property acquisition without needing to pay the full purchase price upfront.

The other options do not accurately represent what a mortgage is. A leasing agreement generally refers to a rental contract rather than a loan, a type of property title relates to ownership rights in property rather than financing, and a claim on a property can refer to various legal interests but lacks the specific context of financing real estate purchases like a mortgage does.