Direct answer
What does mortgage mean?
A mortgage is a security instrument that creates a lien on real property to secure repayment of a debt.
Exam cue: Separate the borrower, lender, note and security instrument.
What does it look like in a question?
Example
A buyer signs a note for the debt and a mortgage that secures the note with the property.
Common exam trap
What should you not confuse it with?
A mortgage is not the money itself and does not equal the promissory note.
Related real estate finance terms
AmortizationAmortization is the repayment of debt through scheduled payments that reduce principal over time.Balloon paymentA balloon payment is a final payment that is substantially larger than the preceding scheduled payments.Debt serviceDebt service is the principal and interest a borrower must pay on a loan during a stated period, usually a year.EquityEquity is the owner's value in property after subtracting liens from the property's value for the calculation being used.ForeclosureForeclosure is the legal process used to enforce a mortgage lien after default and subject the property to sale or another court-ordered remedy.Loan-to-value ratioThe loan-to-value ratio (LTV) is the loan amount expressed as a percentage of the applicable property value or price.
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