Do You Know What A Mortgage Is?
John Andrews/Steven
This article is hopefully going to explain many of the things people believe about mortgages that are actually false. For instance, they are often referred to as a Mortgage Home Loans but they aren't actually loans in the traditional sense of the word. There are three terms that you need to learn that are used: the first is mortgagor (the property owner), the mortgagee (the company that takes on the security for the property) and the mortgage (the contract to pay between the two). What this means is this document is a way for the property to be used to safeguard any potential problems with payment until the house is finally paid for.
The facility that a mortgage creates means individuals and companies can acquire land or property without needing the full face value to purchase it at the time. There are also misconceptions about how they work so below is a description of how the process works. Unfortunately it is our own common use of word like Borrower and Lender that has mislead people into thinking a mortgage is a loan when they should be referred to as Mortgagor and Mortgagee respectively. The security is in fact a lien which means the mortgagee has legal possession of your property until the debt is repaid.
The property you are buying does in fact become collateral for the finance that has been sought to pay for it and is the protection a mortgagee needs if he is going to continue financing house purchases. The lien (document) is normally recorded at the local courthouse in the public records section. 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.
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 process has many names and in the United States it is referred to as foreclosure but this does need to go through the courts. To ensure that everything is legal and above board, the court will place a ruling on the disposal in a process called judicial foreclosure. This is only a short introduction as the subject is much more complex but this information should make this important issue much clearer.
About the Author:
John Andrews/Steven are the owners of the No Foreclosure site. Sign up now for their newsletter and find out the amazing insider formula on how to save your home from being foreclosed on if you do have a mortgage. Do not let it become too late before taking action.
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