Mortgages and property liens are on the increase
April 30th, 2008
Mortgages are more commonplace now than ever before but most people that have them really don’t fully understand what they are. They are not for instance a loan, even though the vast majority of people believe they are and often refer to them as a mortgage home loan.
In fact a mortgage is like a contract whereby the person buying the property liens (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. 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 mortgage has made it possible for people and companies to buy properties with only a small percentage of the purchase price as a deposit. The following information will give a more rounded understanding of how the whole process operates.
The problem arises because so many people refer to the buyer as the Borrower and the financier as The Lender which leads people to believe that the money has been loaned which is not the case. The security the mortgagee uses is called a lien which is a legal term that stays in force until all monies are repaid.
Entry Filed under: Business