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 purchasing does become collateral for the finance, that has been applied for, to pay for it and is the protection a mortgagee needs if he is going to continue financing further house purchases. This lien is recorded within public records likely to be found at a county courthouse or 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 only right that your mortgage gives to the mortgagee over your property is to sell it to recover funds in the case that you do not pay off your debt. 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. Obviously there is much more to the subject than this, but these are the basic foundations upon which the mortgaging system has been constructed. - 15224
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 purchasing does become collateral for the finance, that has been applied for, to pay for it and is the protection a mortgagee needs if he is going to continue financing further house purchases. This lien is recorded within public records likely to be found at a county courthouse or 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 only right that your mortgage gives to the mortgagee over your property is to sell it to recover funds in the case that you do not pay off your debt. 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. Obviously there is much more to the subject than this, but these are the basic foundations upon which the mortgaging system has been constructed. - 15224
About the Author:
The Author: Dai1952 has written many Interesting Articles for ArticleXtra Directory of Articles. See ArticleXtra to get detailed information on all aspects of Finding and Obtaining a Mortgage.
