Final answer:
A mortgage loan is a long-term loan that replaces another loan, typically taken out after construction is completed and used to pay off the construction loan.
Step-by-step explanation:
A mortgage loan is a long-term loan that replaces another loan, typically taken out after construction is completed and used to pay off the construction loan. When a family takes out a mortgage loan to purchase a house, they will repay the loan over the next 30 years. After construction is completed, they may choose to refinance their loan with a mortgage loan that offers more favorable terms or interest rates.
For example, let's say a family initially takes out a construction loan to finance the building of their house. Once the construction is finished, they can then take out a mortgage loan to pay off the construction loan. The mortgage loan will have a longer term and may have lower interest rates than the construction loan, making it more affordable for the family to repay over time.