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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.
Next Article: How does a Security Interest protect the Mortgage Holder? Back to: SECURED TRANSACTIONS
Discussion Question
Can you find out how many homeowners in the United States own homes that are subject to a mortgage? Does this number help you to under the role mortgages played in the economic slowdown in 2008? How do you feel about the ability to use real property to secure a loan that is unrelated to the purchase of property? What do you think about the ability of an owner of real property to have multiple loans secured by the same property?
Practice Question
Veronica is considering opening a small business. She knows that she will need capital to undertake the venture, but she does not have the funds. She is considering her options. She owns a home and has a part-time job as a source of revenue. Can you identify a valid financial option for her?
Related Topics
- Property Law (Intro)
- Tangible and Intangible property?
- Knowledge Capital
- Calculated Intangible Value
- Real and Personal Property?
- Chattel
- Littoral Land
- Fixtures?
- Appurtenance
- Readily Removable Fixtures
- What is ownership?
- Role of Government in ownership of property?
- Allodial System
- Role of property rights in economic activity?
- What are the limitations on property ownership rights?
- What is nuisance?
- What is Zoning?
- What is Eminent Domain?
- Just Compensation
- What is Property Taxation?
- Assessment Ratio
- Millage Rate
- Homeowners Association (HOA)
- Accession?
- Rule of First Possession?
- Lost or Mislaid Items?
- Adverse Possession?
- Encroachment
- Contracts?
- Gift?
- Confusion?
- Establishing and transferring ownership in real property?
- Absolute Title
- Warranty Deed
- Register of Deeds
- Conveyance
- What is a fee simple interest in real property?
- Absolute Interest
- Restrictive Covenant
- What is a life estate in real property?
- What is a leasehold estate in real property?
- What are common types of co-ownership relationships in real property?
- Owning Real Estate Personally vs as LLC
- What if Co-Owners of Real Estate Want Out
- Community Property and Separate Marital Property?
- What is an easement interest in real property?
- What is a license of real or personal property?
- Bundle of Rights
- Absorption Rate
- Fair Housing Act
- Federal Housing Administration (FHA)
- Housing and Urban Development (HUD)
- National Housing Act
- Design Build Contract
- Building Permits
- Certificate of Acceptance
- Construction Surety Bond
- Acquisition, Development, and Construction Loan (ADC)
- Flipping (Real Property)
- Buy, Strip, and Flip
- Homeowner Affordability and Stability Plan
- Building Residual Method
- Accessory Dwelling Unit
- Property Management
- Cost-Plus Contract
- Real Estate Investment Fund
- Listing Agreement
- Property Lawyers
- Multiple Listing Service
- Home Equity
- Register of Deeds
- Title Search
- Opinion of Title
- Certificate of Title
- Abstract of Title
- Chain of Title
- Clear Title
- Cloud on Title
- Defective Title
- Defect of Record
- Action to Quiet Title
- Abeyance
- Encumbrance
- Affidavit of Title
- Warranty of Title
- Title Insurance
- American Land Title Association (ALTA)
- Earnest Money
- Private Mortgage Insurance
- Closing (Property)
- Settlement Statement
- Real Estate Settlement Procedure Act (RESPA)
- HUD-1 Form
- Closing Statement
- Closing Costs
- Buying Real Estate as an LLC
- What is a mortgage?
- What are the Rights of a Mortgage Holder?
- Deed of Trust or Security Deed?
- Trust Deed
- Certificate of Release
- Judicial Foreclosure
- Lis Pendens
- Deficiency Judgment
- Short Sale
- Homeowners Protection Act
- Deed in Lieu of Foreclosure
- Tax Deed
- Tenancy at Will
- Closed End Lease Definition
- One Percent Rule
- Net Lease
- Triple Net Lease (NNN)
- True Lease Definition
- Land Lease Option
- Hell or High Water Contract
- Habendum Clause
- Attornment
- Implied Warranty of Habitability
- Emblements Definition
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Co-Tenancy Clause
- What is a bailment?
- Consignment
- Unilateral-benefit and mutual benefit bailments?