What does it mean to hypothecate a property?

Hypothecating a property refers to the practice of using the property as collateral for a loan while still retaining the right to possess and use the property. This means that the owner of the property pledges it to secure financing, but they do not actually have to give up ownership or control of the property. Instead, they can continue to occupy and utilize it in the usual manner. This concept is important in real estate financing, as it allows property owners to leverage their assets without needing to sell them, thereby keeping their living arrangements or business operations intact while obtaining necessary funds.

The other choices reflect different real estate actions, such as selling, leasing, and renovating property, but they do not capture the specific financial arrangement that hypothecation entails.