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ABOUT MORTGAGE
The term mortgage is borrowed from French and means dead loan.It is associated with loans secured by real estate and sometimes only land may be mortgaged. The mortgage is considered to be the standard method by which peaple can purchase real estate without paying the full value immediately.
In many countries home purchases is funded by a mortgage. In the countries with a high demand for home ownership, strong markets have developed.
Participants
Legal systems share common concepts but vary in the terminology .
The main participants in a mortgage are:
Creditor
The creditor has rights to the debt or other obligation secured by the mortgage. That debt is the obligation to repay the loan by the creditor who provided money to buy the property mortgaged. In most cases creditors are banks or other financial institutions who make loans for real estate purchase.
A creditor is named the mortgagee or lender.
Debtor
The debtor is the person or entity who has the obligation secured by the mortgage.Generally, the debtor must meet the conditions of the loan and the conditions of the mortgage. Otherwise, the debtor usually risks the foreclosure of the mortgage by the creditor to get the debt back. The debtors are the individual home-owners, landlords or businesses who purchase the property by means of a loan.
A debtor is named the mortgagor, borrower, or obligor.
Other participants
The complicated legal exchange, or conveyance, of the property requires legal representation.
Because of the complex nature of markets the debtor may ask for help the mortgage broker or financial adviser to help them find an appropriate creditor by finding the most competitive loan.
The debt is referred to as hypothecation, which may use the services of a hypothecary to assist in the hypothecation.
Legal aspects
There are two types of legal mortgage.
Mortgage by demise
In a mortgage by demise, the creditor becomes the owner of the property until the loan is repaid in full. This kind of mortgage is the form of a conveyance of the property to the creditor, with a condition that the property will be returned on redemption.
This form of mortgage is less common than a mortgage by legal charge.
Mortgage by legal charge
In a mortgage by legal charge, the debtor is the legal owner of the property, but the creditor gains some rights over it to enable him to enforce security, eg. a right to take possession of the property or sell it. As a form of the lender protection, a mortgage by legal charge is recorded in the register. Since mortgage debt is often the largest debt , banks and other mortgage lenders run searches of the real property to make sure that there are no mortgages already registered. Tax liens come ahead of mortgages. If a borrower has delinquent property taxes, the bank often pays them to prevent the lienholder from foreclosing and wiping out the mortgage.
Equitable Mortgage
In an Equitable Mortgage the lender is secured by possession of all the title documents of the property and by borrower's signing a Memorandum of Deposit of Title Deed. This document is an undertaking by the borrower that he deposited the title documents with the bank in order to secure the financing from the bank.
ABOUT MORTGAGE
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