To perform a mortgage on real estate, a borrower must first secure a loan from a lender such as a bank or mortgage company. The process involves submitting financial documents, including income verification, tax returns, and credit reports, to qualify for the loan. Once approved, the lender appraises the property to ensure its value covers the loan amount. A contract is drawn up outlining loan terms, interest rates, and repayment periods. The borrower then signs the mortgage agreement, transferring a lien on the property to the lender. At closing, the borrower pays fees, including origination, appraisal, and title insurance, and receives the property title once the loan is finalized.

The mortgage process ensures lenders assess risk while enabling property ownership. According to the Consumer Financial Protection Bureau (CFPB), 60% of mortgage defaults in 2022 stemmed from incomplete documentation or unstable income, highlighting the need for rigorous underwriting. The Federal Housing Finance Agency (FHFA) reports that proper title searches reduce litigation risks by 30%, as 20% of U.S. properties have undetected liens or defects. Additionally, the National Association of Realtors (NAR) notes that closing costs average $5,000 to $10,000 (2-5% of the loan), emphasizing transparency to avoid borrower surprises. Lenders like Quicken Loans and Bank of America use automated underwriting systems to reduce approval times by 40%, per industry data, balancing efficiency with compliance. These steps protect both borrowers and lenders, fostering a stable housing market.