Question

George borrows funds from Hometown Credit Union (HCU) to buy real property. George signs a written instrument that gives HCU an interest in the property as security for the debt’s payment. This is _________.

Answer 1

Answer:

a mortgage.

Explanation:

A mortgage is a type of loan where real estate serves as collateral. Usually mortgages are used by people wanting to buy real estate since they can borrow larger amounts of money.

In order for the borrower to receive money form the bank, he/she signs a contract by which the bank has a rightful interest in the property. In case the borrower doesn't pay, the bank can foreclose the property.