A long-term bank loan for buying real estate.

A long-term bank loan for buying real estate.

• A. Line of Credit
• B. Bond
• C. Mortgage
• D. Lease

Answer: (C)

A mortgage is a long-term loan secured by real estate, specifically used to finance the purchase of property. It’s typically repaid over many years (often 15–30) with regular payments that cover both principal and interest, and the property itself serves as collateral in case of default. This combination of long repayment horizon and asset-backed security distinguishes a mortgage from the other options: a line of credit is a flexible, revolving borrowing arrangement not tied to a specific purchase; a bond is a debt instrument issued to investors by entities rather than an individual obtaining a loan to buy property; and a lease is a rental agreement that does not involve ownership or a loan to purchase.

A mortgage is a long-term loan secured by real estate, specifically used to finance the purchase of property. It’s typically repaid over many years (often 15–30) with regular payments that cover both principal and interest, and the property itself serves as collateral in case of default. This combination of long repayment horizon and asset-backed security distinguishes a mortgage from the other options: a line of credit is a flexible, revolving borrowing arrangement not tied to a specific purchase; a bond is a debt instrument issued to investors by entities rather than an individual obtaining a loan to buy property; and a lease is a rental agreement that does not involve ownership or a loan to purchase.