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What Is A Mortgage And Why Should I Get One? By: Carol Bell
Mortgages are very common these days but the way they work still confuses people or perhaps it is preferable to say that most people only think they know what one is. 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. In fact a mortgage is like a contract whereby the person buying the property (mortgagor) arranges finance to cover the cost from a lender (mortgagee) and the property is used as security against the debt until it is fully repaid. The document is just a simple way to safeguard the lenders interests.
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. Misunderstandings on how the system works also create problems but the main points are dealt with during the rest of this article. It is because the mortgagor is often referred to as the Borrower that has led to the misunderstanding that the finance for the purchase is a loan in the same way the name Lender is used to refer to the mortgagee. The document itself produces a lien on your property which is not cleared until the debt is paid.
This is the collateral or the security for the mortgagee who has provided the security instrument. Information about the lien is registered at a county courthouse, or similar, to ensure the contract is official and binding. The lien stays in force while the debt remains but the property is actually owned by the mortgagor. What this means is that even though the mortgagee has possession of the mortgage he is not the owner of the property nor does he have the title.
The only time the mortgagee has any rights over your property is in the event that you default on payments when he can sell it to recover the outstanding debt. 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. For the sake of clarity this is only a brief description of a much more complex subject but it should have helped explain the basic subject.
For More Information Visit Our Website www.good4mortgages.co.uk Or Our Blog www.good4mortgages.co.uk/blog
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. Misunderstandings on how the system works also create problems but the main points are dealt with during the rest of this article. It is because the mortgagor is often referred to as the Borrower that has led to the misunderstanding that the finance for the purchase is a loan in the same way the name Lender is used to refer to the mortgagee. The document itself produces a lien on your property which is not cleared until the debt is paid.
This is the collateral or the security for the mortgagee who has provided the security instrument. Information about the lien is registered at a county courthouse, or similar, to ensure the contract is official and binding. The lien stays in force while the debt remains but the property is actually owned by the mortgagor. What this means is that even though the mortgagee has possession of the mortgage he is not the owner of the property nor does he have the title.
The only time the mortgagee has any rights over your property is in the event that you default on payments when he can sell it to recover the outstanding debt. 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. For the sake of clarity this is only a brief description of a much more complex subject but it should have helped explain the basic subject.
For More Information Visit Our Website www.good4mortgages.co.uk Or Our Blog www.good4mortgages.co.uk/blog
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