Question

The house in relationship to its mortgage is considered _____.

credited
collateral
debt
equity

Answer 1

The correct answer that would best complete the given statement above would be the last option. The house in relationship to its mortgage is considered EQUITY. When we say equity, this term is used when referring to an ownership interest in a business. Hope this is the answer that you are looking for.

Answer 2

Answer:

collateral

Explanation:

It is common in mortgage loans that the home is given as collateral. This is a way for the lender to have a guarantee of payment in case of a default by the borrower (person who receives the loan). The mortgage collateral is positive because it provides security to the lender, and this makes the interest rate on this type of loan lower. Thus, both sides have a benefit. However, it is important to comply with the agreement. If a person takes out a mortgage loan, he or she simply has to pay the installments so that he has no problem. Otherwise, the lender can legally claim ownership of the home.