A mortgage is a loan used to purchase a home or property. The borrower agrees to repay the lender over time, usually in monthly installments that include both the loan amount and interest.
How a Mortgage Works
When buying a house, most people cannot pay the full amount upfront. A bank or financial institution provides the money needed to purchase the property, and the buyer repays it over a fixed period such as 15, 20, or 30 years.
The property itself acts as collateral. If the borrower fails to make payments, the lender may take ownership of the property through foreclosure.
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