Mortgage Dictionary: Definition of Collateral
Here is the definition for 'Collateral'. To show a different definition, select a term from the dropdown text box. The online mortgage glossary will display a definition, plus links to related information.
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Collateral
Collateral refers to assets pledged by a borrower to secure a loan.
In the event of a default, these assets are subject to seizure.
For example, when a home owner refinances his/her home, the
home owner often uses the home itself as collateral. If the home owner
should default on the refinanced loan, the lender could repossess the
property.
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