A residential mortgage is a loan specifically used to purchase a home. Borrowers receive funds from a lender, typically a bank or credit union, and agree to repay the loan over a set period, usually 15 to 30 years. The home itself serves as collateral, meaning if the borrower fails to make payments, the lender can take possession of the property through a process called foreclosure. These mortgages come with various terms and interest rates, which can be fixed or adjustable. Borrowers must meet certain criteria, such as creditworthiness and income level, to qualify for a residential mortgage. Understanding these factors is essential for anyone looking to buy a home.