The lender will typically be a financial institution, such as a bank, credit union or building society, depending on the country concerned, and the loan arrangements can be made either directly or indirectly through intermediaries. Mortgage borrowers can be individuals mortgaging their home or they can be businesses mortgaging commercial property (for example, their own business premises, residential property let to tenants, or an investment portfolio). A mortgage can also be described as "a borrower giving consideration in the form of a collateral for a benefit (loan)". The word mortgage is derived from a Law French term used in Britain in the Middle Ages meaning "death pledge" and refers to the pledge ending (dying) when either the obligation is fulfilled or the property is taken through foreclosure. This means that a legal mechanism is put into place which allows the lender to take possession and sell the secured property (" foreclosure" or " repossession") to pay off the loan in the event the borrower defaults on the loan or otherwise fails to abide by its terms.
The loan is " secured" on the borrower's property through a process known as mortgage origination. A mortgage loan or simply mortgage ( / ˈ m ɔːr ɡ ɪ dʒ/) is a loan used either by purchasers of real property to raise funds to buy real estate, or alternatively by existing property owners to raise funds for any purpose while putting a lien on the property being mortgaged.
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