What Different Purposes Do Mortgages Serve?

A mortgage is a high value low risk loan secured against a property.  If the borrower defaults on paying the loan, the lender has the right to seize the property and sell it off to redeem the balance of the loan.  

Most commonly, mortgages are taken out to buy a property.  Without the laws governing mortgage lending, most of us would simply never be able to access the capital required to buy property.  Indeed, this is exactly the case for most people in the world.  If they "own" their homes, it is only in the sense of occupier rights, not true legal possession of the land.

Well, technically the Queen of England still owns all the land in the UK, but it's kind of understood that she probably won't take it back if there's another registered "owner".  Ditto for institutions like the US government.

Anyway, mortgages are also taken out for other reasons, simply as secured, relatively low-interest loans.  A second or third mortgage will probably require faster repayment and a higher interest rate, than for a primary for-purchase loan.  People take mortgages out to:

go on holiday
pay for their children's education
pay for home improvements
finance their old age (as a surrogate pension)
pay for other special experiences.

The possibilities what to do with the money are unlimited, just depends whether the lender thinks their risk on the loan is low enough.

Remortgage means a pay-off of the current mortgage loan in full by use of funds from a new lender. The purpose is to save money, lower payments, pay-off other debt (debt consolidation), cash out, and to obtain a lower interest rate.

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