I don't have any background of loans and finance since I am an Engineer, but I have been planning to own a property lately. What I understood from my research is that there are two options to get a new property, if you don't have enough money in your account to actually buy it from the developer/owner. First is getting a loan from the bank by pledging any of my other existing property on the line as a collateral, and then making monthly payments to the bank (including the interest). Second option is to go for mortgage, where the bank will actually buy the property from the developer/owner and then sell it to you (ofcourse at a higher price). Here, I would own the new property under the clause that if I don't submit the due payments on time, then bank has the right to confiscate the property. However, for the latter case, I don't need any collateral at all and can still own a new property by just paying monthly installments.

But if this is possible, then why don't we see everyone doing it? I mean just go for mortgage, rent out the property and do the monthly payments to the bank, and you might still find yourself saving some money at the end of the month. As soon as get done with the complete payments to the bank, I can have a property written to my name where I haven't actually paid a single penny to own it.

But ofcourse, I don't think it would be that easy. So can anyone make comparison between the pros and cons of both, collateral and mortgage?