Learn about the formation and operation of traditional mortgages, the concepts of purchase-money and future-advance mortgages, and the three theories of mortgages.
In most real estate sales, the buyer needs financing to make the purchase. This lesson will introduce mortgages, which are the most common financing devices. We’ll learn what mortgages are, how they’re formed, and how they affect title to the property.
Let’s begin with some basic concepts and terms.
A mortgage can most simply be defined as a lien granted on real property to secure a debt. [Restatement (Third) of Property (Mortgages) § 1.1.]
The person who grants the mortgage against her...