Question

Janet is considering the purchase of a condo for $150,000, partly financed by a mortgage. She is due to retire in a few years. If she cannot make her mortgage payments on time, she is bound to suffer a _________.

Answer 1

Answer: Loss of collateral

       

Explanation: In simple words, a mortgage refers to the loans that are taken by one entity from the other by using any real estate property as such. The borrower has to make timely payments with interest to pay back the loan.

   As any other loan, in case of any default by the borrower the lender has the legal right to take over the collateral that is given by the borrower.