Mortgage

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Mortgage

Mortgage (pronunciation: /ˈmɔːrɡɪdʒ/) is a term used in the field of finance and real estate. It refers to a legal agreement that allows a bank or other creditor to claim property if a borrower fails to fulfill the terms of the loan agreement.

Etymology

The term "mortgage" originates from the Old French words "mort" meaning "dead" and "gage" meaning "pledge". This is in reference to the deal becoming 'dead' once the obligation is fulfilled or the property is taken through foreclosure.

Related Terms

  • Loan: A sum of money that is expected to be paid back with interest.
  • Creditor: An entity (person or institution) that extends credit by giving another entity permission to borrow money intended to be repaid in the future.
  • Foreclosure: The legal process by which a lender takes control of a property, evicts the homeowner and sells the home after a homeowner is unable to make full principal and interest payments on his or her mortgage.
  • Interest: The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.
  • Principal: The original sum of money borrowed in a loan, or put into an investment.

See Also

External links

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