Which of the following describes a mortgage that uses both real and personal property as security?

A package mortgage is designed to secure both real property, such as land or buildings, and personal property, which can include items like furniture, appliances, and even equipment. This type of mortgage is particularly beneficial for buyers who want to finance not only the purchase of a home but also the personal property needed to furnish and equip that home.

The inclusion of personal property in the mortgage allows the borrower to incorporate more of their financing needs into a single loan, simplifying the borrowing process. This is especially common in commercial real estate or when buying a furnished home where the buyer wishes to acquire both the real estate and additional items necessary for day-to-day living or operation.

In contrast, other types of mortgages such as a conventional mortgage typically involve real property only without the inclusion of personal property. Interest-only and consolidation mortgages also do not encompass personal property as part of their security, focusing instead on different aspects of the borrowing and repayment process. Understanding the unique structuring of a package mortgage is vital for financial professionals and borrowers alike when discussing financing options that encompass broader needs.