Today’s real estate word of the day is collateral, that is Shana Acquisto. I’m Mike Acquisto, real estate brokers, and we’re going to define the word, use it in a sentence and then quickly discuss it.
Ok, the definition of collateral in a home loan, the property is the collateral. The borrower risks losing the property if the loan is not repaid according to the terms of the mortgage or deed of trust.
Very good. And then to use it in a sentence, I’ll go ahead with that and say that the homes are collateral. That secures the note. OK, I guess to just use the definition, do this, but like it is what it is, but that’s how it is. Yeah. All right. And then to briefly discuss it, collateral is kind of an asset. Mm hmm. Right. And they hold it’s like pledged and they could take it if not. But it allows them to secure it have some value there and have some protections. So that’s collateral time.
Some people gamble. They’ll give like a watch or something.
That’s a good point. Right. So you can kind of think of it, think of it that way that they’re put their house up, you know, here and you take this right. You’re guaranteed to pay. Yes, pretty good. It’s.