Casa Academy

Reviewed by Casa Academy and updated July 29, 2026 using the current DBPR checklist and Pearson VUE scheduling guidance.

Mortgage

A mortgage is a security instrument that pledges real property as collateral for a loan, giving the lender a lien interest recorded against title and the right to foreclose if the borrower defaults on the promissory note, while the borrower retains possession and equitable title during repayment.

Exam context

Mortgagor = borrower; mortgagee = lender. Mortgage liens property; note is debt promise. Deed of trust uses trustee. Contract for deed is installment sale, not typical mortgage.

Parties and documents

The mortgagor is the borrower; the mortgagee is the lender. The note creates personal liability; the mortgage creates the property lien. In deed-of-trust states, a trustee holds legal title for foreclosure power of sale. Recording the mortgage protects the lender's priority against later buyers and lienholders.

Lifecycle events

Payoff at sale or refinance releases the lien through a satisfaction or reconveyance recorded by the lender. Default triggers notice and foreclosure per state law. Assumable mortgages allow qualified buyers to take over existing terms subject to lender approval and due-on-sale clauses in most modern loans.

Examples

  • Purchase money mortgage

    A buyer signs a note for $300,000 and grants a first mortgage to the bank securing the same amount against the purchased home.

  • Release on payoff

    After the final payment, the lender records a satisfaction of mortgage clearing the lien so future title searches show free and clear ownership except new encumbrances.

Keep studying

Practice mortgage questionsEnroll in pre-licensing

Related terms

Related resources

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