Mortgages. Understanding The Home Mortgage In Depth.
- Date: 2008-10-31 - Word Count: 397
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There are many misconceptions about mortgages which I hope this article will put right. Some people have gotten into the habit of calling them mortgage home loans but that isn't right at all as they are not loans at all. The borrower who is also called the mortgagor and uses a mortgage to pledge real property to the lender, also called the mortgagee, as security against the debt for the rest of the value of the property. Actually, it is in fact a legal document that is designed to ensure the lenders financial interests are secure.
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. 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 described as the Lender ( falsely leading you to think that a loan has been agreed ). The document produces a lien on your property which is not removed until the debt is settled.
The property you are buying does in fact become security for the loan or mortgage that has been sought to pay for it and is the protection a mortgagee needs if he, or she, is going to continue making house purchases. This lien than becomes a matter of public record when it is registered at the county courthouse or equivalent. The lien stays in force while the debt remains but the property is actually owned by the mortgagor. This situation may seem strange but in essence what it means is that the property is owned completely by the mortgagor and not the mortgagee who also does not have the title.
However if the mortgagor or the owner defaults on his or her payments, the mortgagee has the right to dispose of the property to reclaim funds. This is the dreaded process referred to as foreclosure but if the property is used as security, then the foreclosure must go through the court system. This is done in order for it to be considered legal; this type of foreclosure is referred to as a judicial foreclosure. If you were unsure about the definition before and the subject surrounding it, I trust this information has been of use.
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. 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 described as the Lender ( falsely leading you to think that a loan has been agreed ). The document produces a lien on your property which is not removed until the debt is settled.
The property you are buying does in fact become security for the loan or mortgage that has been sought to pay for it and is the protection a mortgagee needs if he, or she, is going to continue making house purchases. This lien than becomes a matter of public record when it is registered at the county courthouse or equivalent. The lien stays in force while the debt remains but the property is actually owned by the mortgagor. This situation may seem strange but in essence what it means is that the property is owned completely by the mortgagor and not the mortgagee who also does not have the title.
However if the mortgagor or the owner defaults on his or her payments, the mortgagee has the right to dispose of the property to reclaim funds. This is the dreaded process referred to as foreclosure but if the property is used as security, then the foreclosure must go through the court system. This is done in order for it to be considered legal; this type of foreclosure is referred to as a judicial foreclosure. If you were unsure about the definition before and the subject surrounding it, I trust this information has been of use.
Related Tags: finance, mortgage, real estate, mortgages, mortgage brokers, home loan, mortgage rate, mortgage comparison, mortgage calculator, lien, home mortgages, homeowners loan, loan agreement
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