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Land Law – What is Mortgage
A mortgage is, in general, defined as a legal arrangement pertaining to a loan of funds in return for a legal interest over real estate. When the mortgagor fully repays the loan to the mortgagee, this legal transaction is then terminated.
These terms are frequently misunderstood, and it's a popular belief that the organization or individual giving the money is the one who approves the mortgage—this is untrue. A loan secured by real estate that the lender does not own cannot be granted. Think of this as being in a similar situation to a homeowner giving someone a right of way across their property: the homeowner owns the land, thus they grant the right; the third party could not have obtained this right on their own. Similar to this, a homeowner who owns the land grants a mortgage to a lender in return for the lender's financial commitment.
Important word: mortgagor
Since the borrower is also the mortgagor, the borrower will provide a mortgage to the lender in exchange for the money loan.
Important word: mortgagee
A mortgagee is the lender, which is the individual or organization that gives the homeowner a loan in exchange for a proprietary interest in the homeowner's land or other assets.
A mortgage is, in general, defined as a legal arrangement pertaining to a loan of funds in return for a legal interest over real estate. When the mortgagor fully repays the loan to the mortgagee, this legal transaction is then terminated.
These terms are frequently misunderstood, and it's a popular belief that the organization or individual giving the money is the one who approves the mortgage—this is untrue. A loan secured by real estate that the lender does not own cannot be granted. Think of this as being in a similar situation to a homeowner giving someone a right of way across their property: the homeowner owns the land, thus they grant the right; the third party could not have obtained this right on their own. Similar to this, a homeowner who owns the land grants a mortgage to a lender in return for the lender's financial commitment.
Important word: mortgagor
Since the borrower is also the mortgagor, the borrower will provide a mortgage to the lender in exchange for the money loan.
Important word: mortgagee
A mortgagee is the lender, which is the individual or organization that gives the homeowner a loan in exchange for a proprietary interest in the homeowner's land or other assets.
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