My New Outside Blog: Mortgage Definition - It May Not Be What you Think

Mortgage Definition - It May Not Be What you Think

Mortgage Definition - It May Not Be What you Think

 Are you buying a new house?  If so and if you are like most people, you will need the services of a lender...I can suggest a few goods ones that will work hard for you.  Sooner or later the "M" word will be used...and exactly what does Mortgage mean? 

Merriam-Webster defines Mortgage as:  


"A legal agreement in which a person borrows money to buy property (such as a house) and pays back Mortgagethe money over a period of years".  

I think most people have this understanding of what a mortgage is,  and M-W goes on to say : "a conveyance of or lien against property (as for securing a loan) that becomes void upon payment or performance according to stipulated terms", also, "the instrument evidencing the mortgage".  So far so good, but before I give you Merriam-Webster’s second definition let me ask you a question;  Who is giving whom a mortgage?  The bank is giving a buyer a mortgage on the home they want to buy…right?  WRONG!  

Merriam-Webster’s second definition is:  "to give someone a legal claim on property that you own in exchange for money that you will pay back over a period of years".

Any clearer now?  The buyer is giving the party (loaning the money) a legal claim on that property securing the debt.  The buyer is voluntarily placing a lien on their own property in favor of the creditor should the buyer default.   So what actually is taking place is that the buyer is “giving” the creditor (typically a bank or lender) a mortgage.  The lender is the “mortgagee while the buyer is the “mortgagor”.

I found this great HUD web portal that lists most real estate terms in use and gives definitions.

Content originally published at.... 

image courtesy Stuart Miles/

Nick T Pappas

Visit Your Huntsville Real Estate Resource

Serving: Anslee FarmsBell Tower, Bishop Farms, Bradford Farms, BridgefieldCanebrakeChase Shadow, Cherokee Ridge, Clifts Cove, Edgewater, Emerald Forest Condo, Foxfield, Greystone Estates, Hampton Cove, Harvest, Highland Lakes, Jones Valley Estates, Kelly Plantation, Knox Creek, Lake ForestLedges of Huntsville Mountain, Mandolin, Maxwell Place, MidTowne on the Park, Newby Plantation, Olde Cobblestone, Overland Trace, Pebble Brook, Rainbow Landing, Rock Creek, Shadow Brook, Spencer Green, Stavemill Estates, The Bridges on the River, The Villas at Madison, Towne Lakes, Villas at Jones Valley, Walden Preserve, West Highlands, Whitehall, Village of Providence and more.

Comment balloon 15 commentsNick T Pappas • June 12 2014 10:29AM


Nick that is a clear explanation to me.  It all works well until the buyer forgets the "pays back money over a period of years" and decides it to add their own twist to it "as long as the house has equity".  The problem is I don't think I have ever seen "as long as the house has equity" on a Deed or Note.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 4 years ago

Hello Nick ... Very important post and unless a buyer is paying cash, they will be using a lender that creates a mortgage. 


Posted by Robert Vegas Bob Swetz, Las Vegas Henderson Homes for Sale (Realty ONE Group) over 4 years ago

Someone needs to slap a Gold Star on this post quickly!  Very important information.

Posted by Roger D. Mucci, Lets shake things up at your home today! (Shaken...with a Twist 216.633.2092) over 4 years ago

Thanks for sharing the true definition of Mortgage REALTOR Nick T Pappas.  Suggested. 

Posted by John McCormack,, Albuquerque Homes Realty (Albuquerque Homes Realty * over 4 years ago


What a great post.  Consumers need this kind of information to help them better understand. 

Posted by 1 ~Judi & Don Barrett & Chassy Eastep - Integrity, BS Ed, Integrity Real Estate Services -IDABEL OK (Integrity Real Estate Services 118 SE AVE N, Idabel, OK 74745) over 4 years ago

Interesting Mortgage information Nick. Very helpful to the consumer and even an educated Realtor.

Posted by Noah Seidenberg, Chicagoland and Suburbs (800) 858-7917 (Coldwell Banker) over 4 years ago

Nick, when people sign that document they think they own it, when in reality they have a different type of rental

Posted by Ed Silva, Central CT Real Estate Broker Serving all equally (RE/MAX Professionals, CT 203-206-0754 ) over 4 years ago

Nick:  It's always that darn small print that holds the real definition and key to mortgages.  Love the post ... and the education it provides ... 


Posted by Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi, 708.921.6331 - 40+ yrs experience (NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656) over 4 years ago

Good morning Nick. Well done, I don't believe I have every seen anything that describes what it is and how it works any better.

Posted by Joe Petrowsky, Your Mortgage Consultant for Life (Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709) over 4 years ago

Great post to help those in need of understanding what a mortgage is.  Looks like you nailed this definition.

Posted by John F Muscarella, Broker/Owner, Venice, FL, Florida's Suncoast (RIVER FARM PROPERTIES, LLC) over 4 years ago

Hi Nick: Excellent, excellent explanation. This ---OR and ---- EE at the end of a noun becomes confusing to many people. I get confused sometimes too.

The receiver ends with the EE as in payee or lessee or grantee and in your example mortgagee.

Love it Nick. Thanks.

Posted by Maria Gilda Racelis, Home Ownership is w/in Reach. We Make it Happen! (Home Buyers Realty, LLC-Manchester, Bolton. Vernon,Ellington) over 4 years ago

I wanted to provide a definition for what a mortgage is, but the main point that I did not highlight and make clear in the post was that it's the buyer who gives the lender a mortgage. Many times I hear a client or customer ask "will a bank or lender give me a mortgage on this house"?  Or, "I don't know if I can get a mortgage".  I think that is the point that is most often misunderstood.  

Posted by Nick T Pappas, Madison & Huntsville Alabama Real Estate Resource (Assoc. Broker/Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, @HomesBirmingham & Providence Property Mgmnt, LLC Huntsville AL) over 4 years ago

People tend to confuse those terms all the time.  I just use buyER = mortgagOR as a reminder.  Thanks for clearing up the confusion, Nick! 

Posted by Don Sabinske, Sabinske & Associates Inc. (Don Sabinske, Sabinske & Associates Inc.) over 4 years ago

Nick-That's the way to break it down. I'd never looked up the definition of mortgage.

Posted by Wayne Johnson, San Antonio REALTOR, San Antonio Homes For Sale (Coldwell Banker D'Ann Harper REALTORS®) over 4 years ago

I think buyers are all focused on getting a loan from the bank and don't realized that they (buyers) are giving are actually giving the bank a voluntary lien on the home...basically the mortgage!

Posted by Nick T Pappas, Madison & Huntsville Alabama Real Estate Resource (Assoc. Broker/Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, @HomesBirmingham & Providence Property Mgmnt, LLC Huntsville AL) over 4 years ago

This blog does not allow anonymous comments