Definition of mortgage
Simply, a mortgage is a loan to purchase your home. A bank or mortgage lender gives you money to buy your dream house.
Sounds great, huh!
When you decided to buy a house and have decent monthly income but you could not pay the entire value now, then the bank or mortgage lenders come like an angel.
They tell you, no problem, we will finance you the rest of the money, you will repay us with interest over couple of years.
In return, you need to sign an agreement with us that gives us the power to take your house if you become unable to repay the borrowed money plus interest. The house you buy acts as collateral against your borrowed money.
This is called mortgage, the most popular form of finance to buy a house.
What if you have a home but you need some cash! Yes, you can mortgage your home to a bank or mortgage lender and get cash. All other terms and conditions are the same.