A mortgage is a type of loan used to purchase real estate, such as a house or land. It allows the borrower to buy property without paying the full price upfront. Instead, the borrower makes payments over time, typically in monthly installments, until the loan is paid off. The property itself serves as collateral for the loan, meaning the lender can take ownership of the property if the borrower fails to make the required payments..

• Application: The borrower applies for a mortgage through a lender.
• Pre-Approval: The lender evaluates the borrower’s financial situation and creditworthiness to determine how much they can borrow.
• Property Search: The borrower searches for and selects a property to purchase.
• Offer and Appraisal: The borrower makes an offer on the property, and the lender appraises it to ensure its value aligns with the loan amount.
• Underwriting: The lender reviews all the financial details and approves the loan.
• Closing: The borrower signs the mortgage documents, pays closing costs, and finalizes the loan. The lender disburses the loan funds, and the borrower receives the keys to the property.

The borrower repays the mortgage over the term, typically through monthly payments that include both principal and interest. If the borrower fails to make payments, the lender has the right to foreclose on the property, meaning they can seize and sell it to recover the owed amount.