| Is it A Mortgage or Is it A Loan? | | Print | |
| Written by Deane Bruney | ||||||
| Friday, 05 September 2008 | ||||||
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This article is hopefully going to explain many of the things people believe about mortgages that are actually false. For one thing, although we commonly call them Mortgage home loans, this is not at all what they actually are; in fact, they aren't loans at all, nor are they something that has been given to you by lenders.
This article is hopefully going to explain many of the things people believe about mortgages that are actually false. For one thing, although we commonly call them Mortgage home loans, this is not at all what they actually are; in fact, they aren't loans at all, nor are they something that has been given to you by lenders. The terms mortgagee (the financier) and mortgagor (buyer), are part of a legal contract (mortgage) which uses the property as security on the debt. More accurately, it is a document that protects your lender's interest with your property itself and a legal agreement you have provided to a lender. 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 following information will give a more rounded understanding of how the whole process operates. The mortgagor who is also referred to as the Borrower (leading to the false impression that it is a loan) and the mortgagee, who is also called the Lender (again, falsely leading you to think that a loan has been agreed). A lien is a means by which the mortgagor can purchase a home but it is the mortgagee that retains legal ownership until the arrangement between them has been completed (the debt is paid off). The property you are buying does in fact become collateral for the finance that has been sought to pay for it and is the protection a mortgagee needs if he is going to continue financing house purchases. Records of this are normally kept in the public records section of the county courthouse or a similar establishment. Ownership of the property is then yours and cannot be transferred to anyone else until you have paid off the amount required to reverse the lien. So how this works is that the mortgagor (you) owns the property completely even though the mortgagee has possession of the mortgage but not the title. The mortgage is a surety for the benefit of the mortgagee, so should the debt remain unpaid then the amount owed can be reclaimed by the sale of the property. This process has many names and in the United States it is referred to as foreclosure but this does need to go through the courts. This is a legally recognized process that must take place often referred to as 'judicial foreclosure'. If you were unsure about the definition before and the subject surrounding it, I trust this information has been of use. Article Author: Did you review the contract that you signed when you received your mortgage from your financier? Or are you now negotiating for a Mortgage? Visit our website to understand the difference between a mortgage and a loan and avoid foreclosure
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| Last Updated ( Saturday, 21 August 2010 ) | ||||||
