What is a mortgage best described as?

A mortgage is best described as a security interest in real property for a loan. This means that when a borrower takes out a mortgage, they are using the real estate as collateral for the loan they receive from the lender. In this arrangement, the lender gets a legal claim against the property, which secures their investment and provides them with recourse in the event that the borrower defaults on the loan.

This definition emphasizes the relationship between the lender and the borrower, highlighting that the mortgage itself does not transfer ownership of the property to the lender, but instead gives the lender a secured interest in the property until the loan is repaid. Once the loan is fulfilled, the borrower fully owns the property without any liens or claims from the lender.

This is distinctly different from ownership transfer, lease agreements, or insurance types, which involve different legal concepts and purposes in real estate transactions. Ownership transfer refers to the process of conveying title from one party to another. A lease agreement involves renting property for a specified period, while property insurance protects against loss or damage to the property itself rather than creating a loan security interest.