How does a mortgage influence a real estate transaction?

In a real estate transaction, a mortgage serves as an essential instrument of financing. When a buyer takes out a mortgage, they obtain a loan from a lender to purchase property. The key aspect of how a mortgage influences the transaction is that it secures the financing necessary for the buyer to complete the purchase.

Additionally, a mortgage creates a lien on the property, which means that the lender has a legal claim to the property until the borrower fully repays the loan. This lien is significant because it provides a security interest for the lender, ensuring that if the borrower defaults on the loan, the lender can take possession of the property through foreclosure. This relationship between the buyer, the lender, and the property establishes a structure in which the mortgage effectively ties the financing to the asset being purchased.

The other choices highlight aspects that do not align with the fundamental role of a mortgage in a transaction. For instance, mortgages are not restricted to cash transactions; rather, they are integral to financing structures that allow buyers to purchase properties without paying the full price upfront. A mortgage does not guarantee the property's value, as market fluctuations can affect property values, nor does it eliminate the need for a listing agreement, which is a separate contract between a property owner and a real