A loan made against property collateral
Collateral
Transferable assets or a guarantee serving as security against the repayment of a loan, should the borrower default.
. There are two sorts of mortgages:
1) the most common form where the property that the loan is used to purchase is used as the collateral;
2) a broader use of property to guarantee any loan: it is sufficient that the borrower possesses and engages the property as collateral.