Definition
A mortgage is a legal agreement between a lender and a borrower, in which the lender provides funds to the borrower to purchase real estate property, and the borrower agrees to repay the loan with interest over a period of time, typically through monthly payments.
Pronunciation
US English
UK English
Part of Speech
Noun.
Synonyms
loan, home loan, mortgage loan, property loan, charge, security.
Antonyms
No direct antonyms for mortgage.
Word Forms
| Part of Speech | Words |
|---|---|
| Noun | mortgages, mortgager, mortgage, mortgagees, mortgagee, mortgagors, mortgagor, mortgagers |
| Verb | mortgages, mortgaging, mortgaged, mortgage |
| Adjective | None |
| Adverb | None |
Example Sentences
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We had to apply for a mortgage to be able to buy our dream home.
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The bank offers various types of mortgages with different interest rates and terms.
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It took us 30 years to pay off our mortgage, but it was worth it to have a place to call our own.
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It’s important to understand the terms and conditions of a mortgage before signing the contract.
Usage
Mortgage is a commonly used term in the financial and real estate sectors. It is a loan that is secured by a property, typically residential real estate. The borrower, who is usually an individual or a couple, promises to repay the loan with interest over a specified period, usually 15 to 30 years. The mortgage is usually given by a bank or other financial institution, who holds the title to the property until the loan is paid off.
The term mortgage is derived from the Old French word “mort gaige,” which means “dead pledge.” This refers to the fact that the loan is secured by the property, which acts as collateral. If the borrower fails to repay the loan, the lender can foreclose on the property, take possession of it, and sell it to recover the outstanding debt.
There are various types of mortgages available depending on the individual’s financial situation and the property they are buying. Some mortgage types have fixed interest rates, while others have adjustable rates that may increase over time. Some mortgages are insured by the government, while others are privately insured. Prefixes and suffixes such as re-, sub-, -ment, or -age could be added to change the meaning of mortgage. For example, remortgage refers to refinancing an existing mortgage and subprime mortgage refers to a loan issued to a borrower with a less-than-perfect credit score.
Overall, understanding the terms and conditions of a mortgage is essential before signing a contract. It is a long-term commitment requiring a significant amount of money, and there are many risks involved. However, if managed properly, a mortgage can be an excellent tool for buying or investing in real estate.