Mortgages - The Basics


Although many people think the term Mortgage means the loan its-self, it actually means the assignment of a Leasehold, or Freehold Estate, normally a house or business premises, from the borrower to lender (or mortgager to the mortgagee respectively) as a security for the loan. In the event of default (when one mortgage payment or a series of payments are missed, the borrower is referred to as being in default) the lender has the right to take possession of the property and sell it to regain the debt.
The paper work of the mortgage, which are the terms, conditions and evidence are what’s known as a “deed of mortgage” and are signed by the borrower, and the lender. When signed, the deeds are kept with the deeds of the property and are safely kept by the lender.
The purchase of the property and the deeds of the mortgage are contracts, thus are governed by the general law of contract.

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