A 'secured loan' is defined as:
A loan in which a borrower pledges an asset such as a home or car that may be sold if the borrower is unable to repay the loan.
When you take out a mortgage your home is the security for the lender. The lender will usually protect their interest by registering a 'legal charge' or' first charge' against your house. This means that when the house is sold you will first have to repay the lender before paying anyone else or receiving any money from the equity there may be in the house.
When you buy a house you normally sign a document called a 'legal charge' or 'mortgage deed' which will say that if you do not keep up the repayments on the loan the lender can repossess your property. This means they can take over the property and sell it in order to pay back the money they are owed.
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