Washington State Real Estate Practice Exam 2025 - Free Real Estate Practice Questions and Study Guide

A mortgage is fundamentally a lender's security interest in real property. When a borrower takes out a mortgage to finance the purchase of real estate, they are essentially providing the lender with a claim against the property, which serves as collateral for the loan. This means that if the borrower fails to repay the mortgage, the lender has the right to take possession of the property through a legal process known as foreclosure. This security interest ensures that lenders can recover their investment in the event of non-payment.

The other options refer to different aspects of real estate transactions. An agreement between buyer and seller typically describes the terms of a purchase and sale agreement but does not represent the relationship between a borrower and lender. A type of lease agreement relates to rental contracts rather than financing, and a document that transfers ownership pertains to deeds, which are used to convey title from one party to another. In essence, those responses do not capture the key role a mortgage plays within real estate transactions.