What is the term for granting real property as collateral for a mortgage loan?

The correct term for granting real property as collateral for a mortgage loan is hypothecation. In the context of mortgages, hypothecation refers to the practice of using real estate as security for a loan without giving up ownership of the property. The borrower retains the right to use and occupy the property while the lender holds a claim to it as collateral until the loan is repaid.

This process ensures that if the borrower defaults on the loan, the lender has the right to take possession of the property through foreclosure to recover the loan amount. Hypothecation is a common practice in mortgage agreements, enabling individuals to secure financing while maintaining use of their property.

The other terms, while related to property and financing, do not accurately describe the act of using property as collateral for a mortgage loan. Encumbrance refers to any claim or liability against a property that may affect its transferability, pledging typically involves personal property rather than real estate, and subordination deals with the priority of mortgage claims rather than the act of using property as collateral.