A mortgage loan is a debt secured by a piece of real property such as land, a building, or both. Mortgage notes are written then signed by both the lender and borrower. It is a long term liability because it does not all have to be repaid in one year.
If a house and property costs $500,000, few people have $500,000 in cash to spend on the house. They might pay $100,000 in cash and borrow $400,000 in a mortgage loan. If they do not make their monthly payments the lender can come seize their property. The house and land are collateral for the loan.
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