Mortgage - Refinancing

Mortgage can be defined when a property is given to the lender which acts as a security for the loan amount which will be sanctioned

. In other words, mortgage is a security given to the lender by the borrower for the debt taken.

The unit of measurement for mortgage is called as Annual Percentage Rate (APR). It is has been a trend in many countries where a house is purchased with the help of mortgage.

Mortgage Lender

A mortgage lender in legal terms is called as mortgagee. The important role of a mortgagee is to ensure security to the lender. If the borrower fails to pay the amount as decided then the mortgagee has the whole rights to foreclose on the property.

Borrower

A borrower is also called as a mortgagor in legal terms. For a loan to be given to the mortgagor, the borrower has to meet the conditions of the mortgage.

Mortgage by demise

In the case of demise, the lender becomes the owner of the property that was mortgaged until the time the loan is paid completely or any other obligation is fulfilled. This process is known as redemption.

Foreclosure

In mortgage loans, the lender can foreclose on the property that has been kept as a security against the money borrowed if the mortgage amount is not paid on time. If need be, according to legal proceedings they can also sell the property at their sole discretion.

Mortgage loans are also known as non-recourse loans in some jurisdictions. If the amount is not covering up the amount of the outstanding mortgage loan amount even after selling the property then the lender does not have to recourse to the borrower after foreclosure.

First mortgage loans are always non-recourse loans and the second loan is the recourse loans in some places. Mortgage loans can also be applied for any investment proofs like an income- tax proof, to free up equity, investments can be diversified etc.

Equitable mortgage

In equitable mortgage, the lender takes the complete possession of the documents surrendered by the borrower at the time of taking up the mortgage loan. The borrower also signs a Memorandum of Deposit of Title Deed (MODTD). This memorandum mentions that the borrower is undertaking the mortgage loan amount from the bank

by: Sarah Conner

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