When you take out a mortgage your home becomes the collateral. True or Fals

The statement is true.

Explanation:

Mortgage is the long term loan which is issued by the financial institution like banks. These are those loans which are obtained or acquired for a large amount of finance required.

For example, an entrepreneur need a 50 million for the business expansion. Therefore, in this case, usually a house is worth the amount so it is offered as collateral security.

And if entrepreneur fails to make the payment to the lender that is bank, in that case, the bank has an option of claiming the ownership of the property. This result in seizing the mortgage collateral.