Liabilities are the debts and financial obligations that a borrower is responsible for. In a typical home loan or mortgage situation, borrowing money to purchase property creates a liability. Usually these obligations are part of the lending process, and a mortgage note that is taken on a property is a prime example of a liability. In the case of a mortgage, the property that is purchased has a lien that must be satisfied and offsets the amount of equity that an owner has in his or her property. The borrower is liable for the total amount of a mortgage and makes payments on the balance. There are also joint liabilities when a two or more people purchase a property and have a home mortgage or other debt associated with the property. Liability insurance is also chosen by homeowners because it provides financial protection in the event of personal injury or property damage.