Mortgage

A definition for mortgage taken from an Encyclopedia states: "in law, device for protecting a creditor by giving him an interest in property of his debtor. In common law a mortgage was a conditional sale; i.e., the mortgagor (debtor) sold realty (real property mortgage) or personal property (chattel mortgage), but if the debtor paid the debt by a certain time the sale was voided. The mortgagee (creditor) held legal title, the mortgagor equitable title; both estates were salable. Today Great Britain and a majority of states in the United States view mortgages as liens on property. The practical result under the two systems is the same. If the mortgagor does not pay the debt, the creditor seeks a court-ordered sale of the property (foreclosure), and the debt is paid out of the proceeds. During economic depressions many jurisdictions enact temporary mortgage moratorium statutes that give courts the discretionary power to refuse to foreclose mortgages. In a reverse mortgage, a homeowner borrows against the value of a house to receive a line of credit or monthly payments. Reverse mortgages are used by elderly homeowners as a way of obtaining cash, and normally the loan is paid off when the homeowner dies (or sells the property)."

This means a mortgage is basically a legal agreement that creates an interest in real estate between a borrower and a lender. For example, you need to borrow some money and you must guarantee for your loan with something. And the form of guaranteeing is making a mortgage on your house. Like this, if you don't pay your loan, you loose your house. But when you finish paying your debt, the mortgage dissapears and you have again fully rights on your house.

Basically, having a mortgage on your house means that you cannot sell it until the mortgage is off. But you can use it, you can rent it, etc. You just can't sell it because you guaranteed for your loan with it. The same thing goes for mortgages on cars or any other things you own and you can guarantee with.