What is considered collateral when applying for a mortgage?

Collateral in the context of a mortgage refers to an asset that a lender can claim if the borrower defaults on their loan. When applying for a mortgage, the property being purchased serves as the collateral. This means that the lender has a legal right to seize the property through foreclosure if the borrower fails to fulfill their repayment obligations. This arrangement provides security to the lender, as they can recover their losses by taking ownership of the property.

Other factors such as credit score, loan amount, and income level are important aspects of the mortgage application process, but they do not constitute collateral. The credit score assesses creditworthiness, the loan amount is the sum being borrowed, and income level indicates the borrower's ability to repay the loan, but none of these can be seized or claimed by the lender in the event of default like the property can.