Definition of Mortgage
A mortgage is a legal agreement between a borrower and a lender, in which the borrower uses their property as collateral to secure a loan. The borrower transfers an interest in their property to the lender, known as a mortgage, until the loan is fully repaid. If the borrower defaults on the loan, the lender may foreclose on the property and sell it to recover their money.
Kinds of Mortgage
- Simple Mortgage: A simple mortgage is a mortgage in which the borrower pledges the property as security for the loan without transferring possession of the property to the lender.
- Mortgage by Conditional Sale: In a mortgage by conditional sale, the borrower sells the property to the lender on the condition that the borrower will repurchase the property on payment of the loan.
- Usufructuary Mortgage: In a usufructuary mortgage, the borrower gives possession of the property to the lender and the lender is entitled to receive the income or profits generated by the property until the loan is fully repaid.
- English Mortgage: An English mortgage is a mortgage in which the property is transferred to the lender as security for the loan. The borrower has the right to get back the property on repayment of the loan.
- Mortgage by Deposit of Title Deeds: In a mortgage by deposit of title deeds, the borrower deposits the title deeds of the property with the lender as security for the loan. The lender does not take possession of the property, but has the right to sell the property in case of default.
- Anomalous Mortgage: An anomalous mortgage is a mortgage that does not fit into any of the above categories. It may have some features of one or more types of mortgages.
