What is the difference between a lien and a mortgage?

The distinction between a lien and a mortgage is fundamental in understanding property financing and legal claims. A mortgage specifically refers to a legal agreement in which a borrower pledges their property as collateral for a loan, typically for purchasing real estate. This agreement creates a secured interest in the property, meaning that if the borrower defaults on the loan, the lender has the right to foreclose on the property to recoup their losses.

On the other hand, a lien is a broader legal term that refers to a legal right or interest that a lender or another party has in the borrower's property, granted until the debt obligation is satisfied. There can be various types of liens, including tax liens, mechanics liens, and judgment liens, which may not directly relate to financing as mortgages do.

Understanding this, we can see that the definition of a mortgage as a legal claim specifically related to property financing captures the essence of the relationship between the borrower and lender in terms of property security. Mortgages are indeed a specific form of lien, but they are tied to the loan agreement for purchasing property, making this answer particularly accurate in the context of real estate financing.