What is the primary purpose of a mortgage?

The primary purpose of a mortgage is to pledge real property as security for a loan. In a mortgage agreement, the borrower (mortgagor) uses a specific piece of real estate as collateral to secure the loan amount borrowed from a lender (mortgagee). This arrangement ensures that if the borrower fails to repay the loan, the lender has the legal right to foreclose on the property to recover their investment. This security aspect is crucial for lenders, as it mitigates the risk associated with lending money, allowing them to offer loans to borrowers based on the value of the pledged property.

The other options refer to different concepts related to real estate transactions but do not accurately capture the primary function of a mortgage. For example, granting ownership rights pertains more to the process of transferring title and ownership rather than the security arrangement of a mortgage. Providing insurance against default typically relates to private mortgage insurance (PMI) or similar mechanisms but is not the main role of a mortgage itself. Lastly, transferring property titles is part of the conveyancing process, which occurs independently of the mortgage contract. Thus, the correct understanding of a mortgage centers primarily on its function as security for a loan.