A mortgage simply means a loan on a property/house that has to be paid after a period of time. A mortgage is a method of using property (real or personal) as security or the payment of a debt. Mortgages are generally associated with loans secured on property while in some cases only land may be mortgaged.
The concept of mortgage derived when there was doubtfulness of whether or not the mortgagor would pay the debt! In those days, if the mortgagor did not, then the land pledged as security for the debt was taken away.
In general terms the main participants in a mortgage are: creditor and debtor
The creditor has legal rights to the debt or other obligation secured by the mortgage. That debt is often the obligation to repay the loan by the creditor who provided the purchase money to acquire the property mortgaged. Typically, creditors are banks, insurers or other financial institutions who make loans available for the purpose of real estate purchase. A creditor is sometimes referred to as the mortgagee or lender.
The debtor is the person or entity who owes the property secured by the mortgage, and may be multiple parties. Generally, the debtor must meet the conditions of the mortgage. Otherwise, the debtor usually runs the risk of foreclosure of the mortgage by the creditor to recover the debt. The debtors will be the individual home-owners, landlords or businesses who are purchasing their property by way of a loan. A debtor is also referred to as the mortgagor, borrower, or obligor.
Mortgages come in many different sizes, each with its own advantages and disadvantages. Make sure you select the mortgage that is right for you, your future plans, and your financial picture.