What is the difference between a "secured" and an "unsecured" loan?

What is the difference between a "secured" and an "unsecured" loan?

Ron Goodlin (Mortgage Banker and Broker, The Goodlin Group) gives expert video advice on: When do I apply for a mortgage loan?; Who can help me apply for a mortgage loan?; What is collateral? and more...

Secured and unsecured loans. I will only do secured loans. It means, in its simplest terms, that it's a mortgage lien that is attached to the property. With an unsecured loan, you have no recourse in case the borrower stops making their mortgage payment. For example, say you have a $500,000 purchase and you've got a loan amount for $400,000 and it's secured. Therefore, if they stop making payments on the loan, you can actually start the foreclosure process with them. However, if that $400,000 is not secured against the property, you have no recourse. You can try to sue them in court but good luck with that. You really should only be looking at secured lending.