What is a mortgage?

 The concept of foreclosure

A mortgage (in English: Mortgage) is known as a legal agreement between two parties, whereby the ownership of an asset or property is transferred by its owner, who is called the mortgagor, to the lender, who is called the mortgagee. This is as a guarantee for the loan, and the security interest for the lender is recorded in the property documents registry to make it a legal document, so that it is revoked upon payment of the loan in full. [1]

Any type of legally owned property can be mortgaged, and real property is considered; Land and buildings are among the most common properties for foreclosure, and personal property can also be mortgaged. Such as cars, equipment, and jewelry, and they are called movable property, and the right to possess real property, equipment, and vehicles and to use them remains in the possession of the mortgagor, unless the mortgage stipulates otherwise, and the mortgagee has the right to take them at any time to protect his security interest. [1]

Types of mortgage

The homeowner undertakes the residential mortgage of his home to the bank, so that the bank can claim the house in the event that the owner fails to pay the mortgage, and in the event of renting it, the bank may evict the tenants from the house and sell it to settle the mortgage debts owed by the homeowner, and there are several types of mortgage, the most important of which are What follows: [2]

Fixed rate mortgage

In this type of mortgage, the borrower pays the same interest rate throughout the life of the loan, so that the monthly amount that is paid does not change from the beginning of the mortgage until its end, and the rise in market interest rates will not affect what is paid by the borrower. [2]

Adjustable Rate Mortgage

The interest rate in this type of mortgage is set for an initial period, so that it changes with the fluctuation of interest rates in the market, and the initial interest rate is often lower than the market rate, and market interest rates may rise, which may lead to the borrower’s inability to bear higher monthly payments. Interest rates may decrease and this will be in the interest of the borrower, and in both cases it is not possible to predict the monthly payments due after the first payment. [2]

How a foreclosure works

A mortgage is considered a safety tool that is presented to the lender as a document through which its interests are protected. Among the most prominent characteristics related to the mechanism of mortgage action are the following: [3]

The pledge consists of two parties: The mortgagor or the borrower, and the mortgagee who is the lender.

The pledge is recorded in the public registry or in court as a guarantee to the lender against the loan.

The ownership of the mortgage cannot be transferred to another person until the debt is fully paid to release the mortgaged property.

The mortgage property rights remain with the mortgage, and no one else owns the title deed.

The lender has the right to sell the mortgage if the debt is not paid.


^ Ab "mortgage", www.businessdictionary.com, Retrieved 29-5-2019. Edited.

^ APT JULIA KAGAN (9-2-2019), "Mortgage", www.investopedia.com, Retrieved 29-5-2019. Edited.

↑ JANET WICKELL (28-1-2019), "How a Mortgage Works", www.thebalance.com, Retrieved 29-5-2019. Edited.

Cotter writing


Post a Comment