Hypothecate

Definition: To hypothecate is to pledge property as security while retaining possession.

Example

A Florida homeowner grants a mortgage lien while continuing to own and occupy the home.

Keep the distinction clear

Pledging the property does not mean handing it over for the lender's use. The security interest and the owner's possession are different.

Related terms

Collateral · Mortgage · Mortgagor

Keep studying

Mortgages: Borrower, Lender, Ownership, and Key Clauses

References: Cornell LII: hypothecate

Pronunciation (US): hy-PAH-thuh-kayt (capitals show stress)

Pronunciation reference: Merriam-Webster