What role does the lender have in a mortgage agreement?

In a mortgage agreement, the lender plays a crucial role by issuing a loan to the borrower. This loan is specifically intended for the purpose of purchasing real estate, allowing the borrower to buy a home without having to pay the full purchase price upfront. The lender typically provides the necessary funds for the transaction, which the borrower then agrees to pay back over a specified term, usually with interest.

By issuing the loan, the lender also holds a lien on the property, which means they have a legal claim to it until the loan is fully repaid. This arrangement protects the lender's financial interest and ensures that they can recover their investment if the borrower defaults on the loan. The lender's role is essential because it facilitates home ownership by making financing accessible to borrowers who may not have sufficient cash readily available.

The other options do not accurately reflect the lender's primary responsibilities in a mortgage agreement. The down payment is typically provided by the borrower, property insurance is usually the responsibility of the homeowner, and transferring ownership of the property occurs between the buyer and the seller, not the lender.