Mortgage

A mortgage is a loan extended for the purchase of a real asset and secured by the asset purchased i.e. the asset acts as collateral for the loan. Mortgages can be extended on any real asset, including residential and commercial property, cars, ships and aeroplanes, and industrial equipment. If the mortgagor (borrower) fails to keep up payments on the mortgage, the mortgagee (lender) can foreclose on the asset and sell it to get repaid. During the lifetime of the mortgage, the mortgagee has rights over the asset; only on the final mortgage payment does full ownership pass to the mortgagor.