Which option best describes a mortgage?

• A. A loan to purchase real estate.
• B. A specific type of loan that is used to buy real estate.
• C. A personal loan for home improvements.
• D. A grant provided for real estate purchase.

Answer: (B)

Mortgages are loans that are specifically made to buy real estate and are secured by the property itself. That means the home or property serves as collateral for the loan, which is why these loans typically come with long repayment terms and require things like a down payment. Describing it as “a specific type of loan that is used to buy real estate” captures this precision: not every loan is for real estate, and a mortgage is the loan designed for that purpose with the real estate as security.

Other options describe related ideas but aren’t the same: a general loan to purchase real estate could refer to any financing arrangement, not necessarily a mortgage; a personal loan for home improvements is usually not tied to buying property and may be unsecured; a grant is money that doesn’t have to be repaid.