Things You Should Know About Mortgages
JW Lam
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. 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. The mortgage is a legal contract between the mortgagor who is buying the property and the mortgagee, the person supplying the finance and security against the property. This is in fact the document which ensures the financing of the property is safeguarded until the end of the term, usually twenty five years.
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. The way this process works is presented in brief detail during the rest of this article. Being the financier, the mortgagee is the person who lends funds to the mortgagor or borrower. A lien is a means by which the mortgagor can purchase a home but it is the mortgagee that retains legal ownership until the arrangement between them has been completed (the debt is paid off).
This system works so successfully because the risk of loss on the part of the mortgagee is all but eliminated as they have legal possession of the property until the debt is completely repaid. Being a legal contract, the lien will be lodged within the records at the county or city courthouse (or a similar public office). So while the property is recorded as yours, there is an interest in its ownership which cannot be altered until the debt is paid off. Even if your property is mortgaged, you still own the property wholly and completely and nobody else, not even the mortgagee has title to the property.
The only right the mortgagee has over the property now is if payments are missed and the property needs to be sold so the mortgagee can recoup his 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. 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:
|
