mortgage

noun
mort·​gage | \ ˈmȯr-gij How to pronounce mortgage (audio) \

Definition of mortgage

 (Entry 1 of 2)

1 : a conveyance (see conveyance sense 2a) of or lien against property (as for securing a loan) that becomes void upon payment or performance according to stipulated terms took out a mortgage in order to buy the house
2a : the instrument evidencing the mortgage
b : the state of the property so mortgaged
c : the interest of the mortgagee in such property

mortgage

verb
mortgaged; mortgaging

Definition of mortgage (Entry 2 of 2)

transitive verb

1 : to grant or convey by a mortgage
2 : to subject to a claim or obligation : pledge

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Synonyms for mortgage

Synonyms: Verb

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Examples of mortgage in a Sentence

Noun He will have to take out a mortgage in order to buy the house. They hope to pay off the mortgage on their home soon. Verb She mortgaged her house in order to buy the restaurant. I've mortgaged all my free time this week to the hospice and won't be able to come to the party.
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Recent Examples on the Web: Noun Synovus was recognized last month as a leader in diversity and inclusion among mortgage lenders. William Thornton | Wthornton@al.com, al, "Synovus recognized for diversity in mortgage lending," 1 Nov. 2019 That is, until 2010, when Gilbert moved the headquarters of his company Quicken Loans, the nation’s largest mortgage lender, from the suburbs of Detroit to the center of downtown. NBC News, "While there's no silver bullet to address the longstanding inequities in Detroit, investing in students is a good place to start," 23 Oct. 2019 And in that crisis was the reality that many mortgage lenders were giving free rein to take advantage of Black homeowners. Michael Arceneaux, Essence, "Stop Trying To Sanitize The Image Of A War Criminal," 10 Oct. 2019 Nothing stuck until 2015, when a representative for Dan Gilbert, the billionaire founder of mortgage lender Quicken Loans and owner of the NBA's Cleveland Cavaliers, got wind of the concept — and reached out. Michelle Toh, CNN, "This billion-dollar startup is turning sneakers into a 'stock market'," 25 Sep. 2019 The agency already collects some income flow information — interest income, dividends, capital gains — through banks, mortgage lenders, mutual funds and insurance companies. Author: Laura Davison, Anchorage Daily News, "Warren’s wealth tax would be an IRS headache and boon for appraisers," 22 Sep. 2019 The parent of residential mortgage lender Stearns Lending LLC has filed for bankruptcy after agreeing with majority owner Blackstone Group LP to a debt-restructuring plan that will erase more than $180 million in bond debt from its balance sheet. Patrick Fitzgerald, WSJ, "Mortgage Lender Stearns Holdings Files for Bankruptcy," 9 July 2019 Unfortunately, paying collection accounts typically doesn’t help your credit scores, especially the scores used by most mortgage lenders. Liz Weston | Nerdwallet.com, oregonlive.com, "Liz Weston: Tips for adding positive credit to help offset negative information," 15 June 2019 Unfortunately, paying collection accounts typically doesn’t help your credit scores, especially the scores used by most mortgage lenders. Liz Weston, latimes.com, "How to boost your credit score before you buy a house," 9 June 2019 Recent Examples on the Web: Verb Shepard mortgaged his wife’s home to finance the trip, and invited Jack along because of the young man’s muscle and skill at roughing it. Smithsonian, "Gold Fever! Deadly Cold! And the Amazing True Adventures of Jack London in the Wild," 24 Oct. 2019 Her family was frantically trying to mortgage their farmland to pay for an appeal. Niha Masih, Washington Post, "A crackdown in India on suspected illegal immigrants could leave millions stateless," 26 Aug. 2019 Their property is now mortgaged to an informal lender who frequently sends agents to threaten them. The Economist, "Microfinance is driving many Sri Lankan borrowers to despair," 15 Aug. 2019 Unlike in the last downturn, homeowners aren’t mortgaged to the hilt. Los Angeles Times, "Is Trump relying on American consumers to save the economy from recession?," 22 Aug. 2019 The soaring cost of higher education has strained household budgets across the country and required millions of Americans to depend on loans, with total student debt now at a record $1.6 trillion, second only to mortgage debt. Aimee Picchi, CBS News, "Graduates of these U.S. colleges earn the most," 20 Aug. 2019 Credit Ed Stefanski, the team’s senior advisor, who managed to improve the roster this summer without mortgaging the future. Shawn Windsor, Detroit Free Press, "Pistons can't attract a Kawhi Leonard. But they do have a reason for hope," 7 July 2019 The Nets essentially mortgaged a considerable amount of their future for one trip to the conference semifinals, in 2014. Scott Cacciola, New York Times, "Kyrie Irving Commits to Brooklyn, Cementing Nets as Kings of New York," 30 June 2019 PdVSA has mortgaged Citgo to raise financing, pledging its stock to bondholders and to Russia’s PAO Rosneft. Andrew Scurria, WSJ, "Venezuela Strikes Deal to Save Citgo From Seizure," 25 Nov. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'mortgage.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of mortgage

Noun

15th century, in the meaning defined at sense 1

Verb

15th century, in the meaning defined at sense 1

History and Etymology for mortgage

Noun and Verb

Middle English morgage, from Anglo-French mortgage, from mort dead (from Latin mortuus) + gage gage — more at murder

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Statistics for mortgage

Last Updated

16 Nov 2019

Time Traveler for mortgage

The first known use of mortgage was in the 15th century

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More Definitions for mortgage

mortgage

noun

Financial Definition of mortgage

What It Is

A mortgage is a loan in which property or real estate is used as collateral. The borrower enters into an agreement with the lender (usually a bank) wherein the borrower receives cash upfront then makes payments over a set time span until he pays back the lender in full.

How It Works

Mortgage loans are usually entered into by home buyers without enough cash on hand to purchase the home. They are also used to borrow cash from a bank for other projects using their house as collateral.

There are several types of mortgage loans and buyers should assess what is best for their own situation before entering into one. Types of loans are characterized by their term dates (usually from 5 to 30 years, some institutions now offer loans up to 50 year terms), interest rates (these may be fixed or variable), and the amount of payments per period.

[If you're ready to buy a home, use our Mortgage Calculator to see what your monthly principal and interest payment will be.]

Mortgages are like any other financial product in that their supply and demand will change dependent on the market. For that reason, sometimes banks can offer very low interest rates and sometimes only they can only offer high rates. If a borrower agreed upon a high interest rate and finds after a few years that rates have dropped, he can sign a new agreement at the new lower interest rate -- after jumping though some hoops, of course. This is called "refinancing."

Why It Matters

Mortgages make larger purchases possible for individuals lacking enough cash to purchase an asset, like a house, up front. Lenders take a risk making these loans as there is no guarantee the borrower will be able to pay in the future. Borrowers take risk in accepting these loans, as a failure to pay will result in a total loss of the asset.

Home ownership has become a cornerstone of the American Dream. For most people, their home is their most valuable asset. Mortgages make home buying possible for many Americans. Mortgages are not always easy to secure, however, as rates and terms are often dependent on an individual's credit score and job status. Failure to repay allows a bank to legally foreclose and auction off the property to cover its losses.

Source: Investing Answers

balloon mortgage

noun

Financial Definition of balloon mortgage

What It Is

A balloon mortgage is a mortgage with a large payment made near or at the end of a loan term.

How It Works

Unlike a loan whose total cost (interest and principal) is amortized -- that is, paid incrementally during the life of the loan -- most or all of a balloon mortgage's principal is paid in one sum at the end of the term. That sum is called the balloon payment (or sometimes the bullet). Sometimes the interest is collected as part of the balloon payment as well, though in many cases the loan is interest-only during the term of the loan with only the outstanding principal due at the end.

For example, suppose someone takes out a mortgage for $417,000. To avoid a lengthy graphic with 360 payments for a 30-year mortgage, we'll assume that the mortgage is only two years long (this is an unrealistic loan term, but it works for our purposes).

In a normal mortgage scenario (the left side of the graphic), the borrower would make a series of equal payments that are composed of principal repayment and interest payment so that by the end of the loan term, the borrower has paid down all of the loan. For a balloon mortgage (the right side of the graphic), however, the monthly payments might be extremely low for most of those two years—because at the end of the two years the borrower has to make a giant balloon payment to pay off the loan.

Why It Matters

Balloon mortgages can be common, and they have the advantage of lower initial payments. They can be preferable for people who have near-term cash flow issues but expect higher cash flows later, as the balloon payment nears. The borrower must, however, be prepared to make that balloon payment at the end of the term. Sometimes the lender will roll that amount into a new mortgage for the borrower. This is often called a two-step mortgage.

Source: Investing Answers

junior mortgage

noun

Financial Definition of junior mortgage

What It Is

A junior mortgage is a loan secured by the equity in a house. Equity equals the value of the house less the balance owed on the homeowner's first (or in some cases, preceding) mortgages.

Junior mortgages are not the same as home equity lines of credit (HELOCs).

How It Works

Junior mortgages are very similar in concept to traditional mortgages. For example, junior mortgages generally must be repaid over a fixed period. Some lenders may offer fixed rates on these loans; others might offer variable rates.

Like first mortgages, most banks will also charge points and other fees for generating the junior mortgage (attorney fees, title fees, insurance and documentation fees, for example), and these costs vary by bank. In some cases, the lender might charge a fee if the borrower prepays the loan. And because the loan is secured by a house, if the borrower defaults, the lender may foreclose on the house.

Why It Matters

Junior mortgages can be viable options when compared to credit cards or other high-interest, unsecured loans. In addition, mortgage interest is tax deductible, making the interest rates on junior mortgages sometimes lower than they appear when one considers the tax savings.

However, not all junior mortgages are created equally. Borrowers are well served to compare fees, interest rates and repayment terms among lenders. After all, when a borrower defaults, his or her home could end up belonging to the bank for good.

Source: Investing Answers

mortgage

noun
How to pronounce mortgage (audio)

English Language Learners Definition of mortgage

 (Entry 1 of 2)

: a legal agreement in which a person borrows money to buy property (such as a house) and pays back the money over a period of years

mortgage

verb

English Language Learners Definition of mortgage (Entry 2 of 2)

: 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

mortgage

noun
mort·​gage | \ ˈmȯr-gij How to pronounce mortgage (audio) \

Kids Definition of mortgage

 (Entry 1 of 2)

1 : a transfer of rights to a piece of property (as a house) that is usually in return for a loan of money and that is canceled when the loan is paid
2 : the document recording such a transfer

mortgage

verb
mortgaged; mortgaging

Kids Definition of mortgage (Entry 2 of 2)

: to transfer rights to a piece of property in return for a loan of money with the understanding that the rights end when the loan is paid

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mortgage

noun
mort·​gage | \ ˈmȯr-gij How to pronounce mortgage (audio) \

Legal Definition of mortgage

 (Entry 1 of 2)

1a : a conveyance of title to property that is given to secure an obligation (as a debt) and that is defeated upon payment or performance according to stipulated terms shows that a deed was intended only as a mortgage— W. M. McGovern, Jr. et al.
b : a lien against property that is granted to secure an obligation (as a debt) and that is extinguished upon payment or performance according to stipulated terms creditors with valid mortgages against the debtor's property— J. H. Williamson
c : a loan secured by a mortgage
adjustable rate mortgage
: a mortgage having an interest rate which is usually initially lower than that of a mortgage with a fixed rate but which is adjusted periodically according to an index (as the cost of funds to the lender)
balloon mortgage
: a mortgage having the interest paid periodically and the principal paid in one lump sum at the end of the term of the loan
blanket mortgage
: a mortgage of or against all of the property of the mortgagor
chattel mortgage
: a mortgage of or against personal or movable property (as an airplane) — compare pledge security interest sense 2 at interest sense 1
collateral mortgage
in the civil law of Louisiana : a mortgage against movable or immovable property that is given to secure a written obligation (as a note) which is pledged as collateral security for a principal obligation — see also collateral note at note
construction mortgage
: a mortgage that secures a loan which finances construction
conventional mortgage
1 in the civil law of Louisiana : a mortgage that is created by a written contract
2 : a mortgage that is not guaranteed by a government agency
equitable mortgage
: a constructive or implied mortgage : a transaction (as a conveyance) that does not have the form of a mortgage but is given the effect of a mortgage by a court of equity because the parties intended it to be a mortgage
first mortgage
: a mortgage that has priority over all other security interests except those imposed by law
fixed rate mortgage
: a mortgage having an interest rate that stays the same
general mortgage
in the civil law of Louisiana : a blanket mortgage that burdens all present and future property
home equity conversion mortgage
: reverse mortgage in this entry
judicial mortgage
in the civil law of Louisiana : a mortgage lien that secures a judgment debt and is created by filing a judgment with the recorder of mortgages
junior mortgage
: second mortgage in this entry
leasehold mortgage
: a mortgage under which a leasehold interest in property secures a loan or obligation
legal mortgage
in the civil law of Louisiana : a mortgage that secures an obligation which is created by a law and which does not have to be stipulated to by the parties
open-end mortgage
: a mortgage that secures a loan agreement which allows the mortgagor to borrow additional sums usually up to a specified limit
purchase money mortgage
: a mortgage that is given (as to a lender) to secure a loan for all or some of the purchase price of property also : a mortgage given to a seller of property to secure the unpaid balance of the purchase price
reverse mortgage
: a mortgage that allows elderly homeowners to convert existing equity into available funds provided through a line of credit, a cash advance (as for the purchase of an annuity), or periodic disbursements to be repaid with interest when the home is sold or ceases to be the primary residence, when the borrower dies or some other specified event occurs, or at a fixed maturity date
second mortgage
: a mortgage lien that is subordinate in priority to a first mortgage

called also junior mortgage

senior mortgage
: first mortgage in this entry
special mortgage
: a mortgage on specified property
wrap-around mortgage \ ˈrap-​ə-​ˌrau̇nd-​ \
: a second or later mortgage that incorporates the debt of a previous mortgage with additional debt for another loan
2a : an instrument embodying and containing the provisions of a mortgage executing and recording mortgages
b : the interest of a mortgagee in mortgaged property the bank holds the mortgage
mortgaged; mortgaging

Legal Definition of mortgage (Entry 2 of 2)

1 : to grant or convey by a mortgage mortgaged the property to the bank
2 : to encumber with a mortgage

History and Etymology for mortgage

Noun

Anglo-French, from Old French, from mort dead (from Latin mortuus) + gage security

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