Amortgage refers to hypothecation of a property to a bank or housing finance company. This is done as a security for a loan. The usual form ...
Amortgage refers to hypothecation of a property to a bank or housing finance company. This is done as a security for a loan. The usual form of security which banks insist on is mortgage of the house for which the loan is being availed of by the borrower.
The transferor is called a mortgagor. The transferee is called a mortgagee. The principal money and interest of which payment is secured are called the mortgage money, and the instrument by which the transfer is effected is called a mortgage deed. Under the Transfer of Property Act, Section 58 defines mortgage as the transfer of an interest in specific immoveable property for the purpose of securing payment of money advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
Mortgage of property gives the lender a right to acquire and sell the property in case of default by the borrower in repayment of either the loan amount or other dues in accordance with the agreed terms and conditions. It creates a legally binding contract between the parties. The execution of the mortgage documentation is done simultaneously with the loan documentation. The bank has the first right on the property for which they provide loan. In case there are more than one lender, a pari passu charge is created in favour of all the lenders.
The transferor is called a mortgagor. The transferee is called a mortgagee. The principal money and interest of which payment is secured are called the mortgage money, and the instrument by which the transfer is effected is called a mortgage deed. Under the Transfer of Property Act, Section 58 defines mortgage as the transfer of an interest in specific immoveable property for the purpose of securing payment of money advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
Mortgage of property gives the lender a right to acquire and sell the property in case of default by the borrower in repayment of either the loan amount or other dues in accordance with the agreed terms and conditions. It creates a legally binding contract between the parties. The execution of the mortgage documentation is done simultaneously with the loan documentation. The bank has the first right on the property for which they provide loan. In case there are more than one lender, a pari passu charge is created in favour of all the lenders.
