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Loan and Mortgage Terms Glossary |
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Collateral:
Something of value pledged as security for a loan. In mortgage lending, the property itself serves as collateral for a mortgage loan. 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. Also one of the Five "Cs" used in determining a loan applicant's credit worthiness.
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