What type of loan is specifically designed for purchasing real estate?

A mortgage loan is specifically designed for purchasing real estate. This type of loan involves borrowing a large sum of money to buy property, with the property itself serving as collateral for the loan. This means if the borrower fails to repay, the lender has the right to take possession of the property through a process known as foreclosure.

Mortgage loans typically come with specific terms, including lower interest rates than personal loans or credit cards, because they are secured by real estate. They also involve processes such as property appraisals and inspections, which are not part of the other mentioned loan types. This ensures that both the lender and borrower have a clear understanding of the value of the property and the obligations tied to the loan, making it a distinctly different product well-suited for real estate purchases.