A mortgage is an arrangement under which a lender makes a loan in return for an interest in real property that secures the loan.
Mortgages are the most common and traditional means of financing the purchase of real estate.
Most home mortgage loans are made by mortgage companies, banks, savings and loan associations, or building and loan associations. However, anyone, including a private individual, may make a mortgage loan. There are two competing legal theories about the legal nature of a mortgage arrangement. A minority of states adhere to the title theory of mortgages under which the title to the property being mortgaged remains with the lender until the loan is paid. Once the loan is paid, the title to the property passes to the purchaser.