What does a mortgage pledge as security for the loan?

A mortgage primarily serves as a lien against real estate property as security for the loan. When a borrower takes out a mortgage, they agree to use their real property—such as a home or land—as collateral. This means that if the borrower fails to fulfill their repayment obligations, the lender has the right to take possession of the property through a legal process called foreclosure.

In the context of real estate finance, it is essential to understand that the mortgage creates a security interest in the real estate, ensuring that the lender has a claim to the property. This arrangement provides the lender with a level of assurance that their investment is protected, as the property can be sold to recoup the outstanding debt in the event of default.

Other options like personal property, cash reserves, or future earnings do not typically serve as security in a traditional mortgage context. Personal property could refer to movable assets, cash reserves are liquid funds not tied to real estate, and future earnings are speculative and not tangible assets that can be pledged in real estate transactions.