Real estate financing refers to the methods and processes used to fund the purchase of property, such as residential homes or commercial buildings. This often involves obtaining a loan from a bank or financial institution, where the property itself serves as collateral. Common types of financing include mortgages, home equity loans, and commercial loans. Investors and buyers typically assess their financial situation and creditworthiness before seeking financing options. Interest rates, loan terms, and down payment requirements can vary significantly, impacting the overall cost of the property. Understanding these factors is crucial for making informed decisions in the real estate market.