Collateral Mortgage

Sam · Posted: Tue Jun 01, 2004 3:40 am Post subject: Collateral Mortgage

Collateral Mortgage is one in which property, real or personal, is promised as a security for getting a loan.

Features of Collateral Mortgage:

The money which is borrowed, can be used to buy a property or for another purpose such as home renovation or for a vacation.
It is a kind of mortgage which secures a loan by way of a promissory note.

For Example, Jackson wanted to take a loan of $200,000 for his house renovation by collateral mortgage, so he has kept his house as collateral by signing a promissory note. Now his house is considered as collateral for the loan, and the house can be taken back from Jackson if the loan is not repaid.

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