Mortgage refers to hypothecation of the property to a bank or Housing Finance Company (HFC). This is done as a security for the loan availe...
Mortgage refers to hypothecation of the property to a bank or Housing Finance Company (HFC). This is done as a security for the loan availed of by the borrower to purchase this property.
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 either of the following - payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
The transferor is called a mortgagor, the transferee 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.
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/HFC has the first right on the property for which they provide the loan. In case there is more than one lender, the ‘pari passu’ charge is created in favour of all the lenders.
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 either of the following - payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
The transferor is called a mortgagor, the transferee 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.
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/HFC has the first right on the property for which they provide the loan. In case there is more than one lender, the ‘pari passu’ charge is created in favour of all the lenders.
