Information About Mortgage

Published by admin | Filed under Credit Loan

The most important thing you must realize about a mortgage is that what you believe it to be is actually wrong. A common misconception is that a Mortgage is a Home Loan but this is false and people need to be educated about the fact that it is not a loan at all. The mortgagor is the person who owes money to the mortgagee (the person who finances the deal) using a legal contract called a mortgage. However, it is easier to explain it as a legally binding document where the lender is protected from loss by using the property as security for the debt.

The mortgage has made it possible for people and companies to buy properties with only a small percentage of the purchase price as a deposit. The way this process works is presented in brief detail during the rest of this article. Being the financier, the mortgagee is the person who lends funds to the mortgagor or borrower. The security the mortgagee uses is called a lien which is a legal term that stays in force until all monies are repaid.

The property therefore becomes its own form of security for the finance that has been supplied to purchase the property. Information about the lien is registered at a county courthouse, or similar, to ensure the contract is official and binding. This act makes the purchase and the ownership of the house official and no-one can transfer this ownership until the debt is fully paid off. What this means is that even though the mortgagee has possession of the mortgage he is not the owner of the property nor does he have the title.

This means the only occasion that can arise whereby the mortgagee can legally sell your home is if you stop making payments and it needs to be sold to repay the finance used to purchase it. Should they need to reclaim these costs then the case will be held in court and the procedure called foreclosure will be started. This is done in order for it to be considered legal; this type of foreclosure is referred to as a judicial foreclosure. This is only a short introduction as the subject is much more complex but this information should make this important issue much clearer.

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