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Mortgage  Question?
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Is a Personal Loan a Mortgage?

Is a personal loan a mortgage?

Michael Jensen, Mortgage and Finance Guru
, Mortgage and Finance Guru

From a technical standpoint, a mortgage is any loan that is secured by real property such as a home or land. Simply put, the mortgaged property is collateral for the loan which means if you default on the loan the lender can seize the property to pay off the outstanding loan balance.  Many personal loans are unsecured which means they are not secured by real property and therefore they are not considered mortgages.

To determine if a personal loan is a mortgage you can review the loan documents to understand the collateral or security provided for the loan, if any.  If the documents say that the loan is secured by a home or other real property, then technically the loan is a mortgage.  If the documents say that the loan is unsecured or secured by something other than real property, such as a car, then the personal loan is not a mortgage. 

Additionally, all mortgages are required to be recorded with your county recorder office. The county recorder office keeps a record of any mortgages or other loans secured by real property. So you can go to your county recorder and check what liens and loans are recorded against a specific property.  If there is no record of a personal loan being recorded as a lien on a property then the loan is not a mortgage and the property cannot be used as collateral for the loan.

If you cannot resolve your question after reviewing the loan documents or contacting your county recorder office, I recommend that you contact a real estate attorney to look into the issue. Additionally, if you believe that a lender acted in bad faith or in a predatory manner I recommend that you contact your state attorney general's office or the Consumer Finance Protection Bureau (CFPB) to review your situation more closely.

Finally, we recommend that you carefully review all loan documents, and especially the terms that outline the collateral or security provided for  the loan, before signing any documents and taking out a personal loan.

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About the author

Michael Jensen, Mortgage and Finance Guru

Michael is the co-founder of FREEandCLEAR. Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade. His work has been featured in leading national and industry publications. More about Michael

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