What is the purpose of a mortgage?

A mortgage serves the specific purpose of providing a loan to purchase real estate, and it is secured by the property itself, which acts as collateral. This means that if the borrower fails to make the required payments, the lender has the legal right to take possession of the property through foreclosure. This arrangement allows individuals to afford homes without needing to pay the full price upfront. The mortgage structure involves a long-term repayment plan, enabling borrowers to manage housing costs over an extended period, typically 15 to 30 years, while the home equity builds over time.

The other options pertain to different types of loans or financial products that serve distinct roles and do not encapsulate the primary function of a mortgage. Short-term loans for home improvements, investments in stocks, or personal loans for various purposes do not utilize real estate as collateral and are not tied in the same manner to the purchase of property. Thus, the unique characteristics and purpose of a mortgage align specifically with enabling real estate transactions, making it the correct answer.