Question by mAriCriS o: why in most cases, loans are secured on real estate?
Best answer:
Answer by andy t
its the most expensive item most people will own so you are less likely to default secondly, you can’t move/hide it to stop bailiffs from seizing it!
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Because it is an INVESTMENT with a value/price tag such that the average person can not afford to pay case for it. All mortgages are secured by the home but other loans may be unsecured loans meaning no collateral is necessary.
It really depends on the loan size, type of financing and or lowest payment you need.
Lenders can go after your property, file a notice of default when payments become over 90 days delinquent than proceed with a foreclosure (quite common in our real estate market today). When you have an unsecured loan (not secured to real property) there is not much the lender can do but affect your credit score by lowering it.