A home loan is simply money borrowed against the equity in the real estate owned by the borrower. A lender will most likely provide a home loan to a borrower in exchange for interest on the monies owed. If the borrower fails to pay back the loan the lender may foreclose on the property in order to recuperate his or her money.

In the United States most home loans are secured through a mortgage.

To obtain a home loan a borrower must own the property or be willing to purchase real estate with the home loan. Some loan programs allow borrowers to put as little as 3.5% down to purchase a home , such as those offered by the FHA secured home loans.