Mortgage financing- traditional way of borrowing money to purchase a home. Home mortgage- real estate loan with equal monthly payments: payments may increase or decrease according to changes in interest rates. Mortgager- person who gives the security to obtain the loan homeowner. Receives funds and maintains possession of property. Mortgagee- lender who receives the title to the property until the debt is fully repaid: first mortgage- mortgage where the conveyance of title is involved. Second mortgage-conveys the right to a further equity of redemption which can again be mortgaged: third mortgage- further equity of redemption is mortgaged, right to reclaim title of home upon full repayment of loan retained by the mortgager. Basic concepts and terminology: principal- amount of money that is being borrowed, amortization- gradual retirement of a debt by means of partial payments of the. Most common terms for home mortgages are 6 months, 1-5 years. Mortgager financing mathematics: 5 important elements in a mortgage.