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Simple English definitions for legal terms
legal mortgage
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A quick definition of legal mortgage:
A legal mortgage is when someone borrows money and gives their property as security. If they don't pay back the money, the lender can take the property. The mortgage is a document that explains the terms of the agreement. There are different types of mortgages, like ones with adjustable interest rates or ones where the borrower only pays interest at first. A mortgage can cover one property or multiple properties. If someone has more than one mortgage, the first one has priority over the others.A more thorough explanation:
A legal mortgage is a type of mortgage where the borrower transfers the title of their property to the lender as security for a debt or obligation. The mortgage becomes void once the borrower pays off the debt or fulfills their obligation according to the agreed terms.
For example, if a person takes out a loan to buy a house, they may offer the house as collateral to the lender. The lender will hold the title to the property until the borrower pays off the loan. If the borrower fails to pay, the lender can foreclose on the property and sell it to recover their money.
Other types of mortgages include adjustable-rate mortgages, where the interest rate can change over time, and fixed-rate mortgages, where the interest rate remains the same throughout the loan term.