Mortgage Refinancing: What you Need to Know about Mortgages
Despite increasing numbers of the population having a mortgage, it is amazing how few people actually know what they are and how they work. Some people have gotten into the habit of calling them mortgage home loans but that isn’t right at all as they are not loans at all. There are three terms that you need to learn that are used: the first is mortgagor (the property owner), the mortgagee (the company that takes on the security for the property) and the mortgage (the contract to pay between the two). More accurately, it is a document that protects your lender’s interest with your property itself and a legal agreement you have provided to a lender.
The facility that a mortgage creates means individuals and companies can acquire land or property without needing the full face value to purchase it at the time. The way this process works is presented in brief detail during the rest of this article. Being the financier, the mortgagee is the person who lends funds to the mortgagor or borrower. A lien is a means by which the mortgagor can purchase a home but it is the mortgagee that retains legal ownership until the arrangement between them has been completed (the debt is paid off).
This means that the property becomes security against itself and is the protection a mortgagee requires to fulfill his promise of funding. This lien than becomes a matter of public record when it is registered at the county courthouse or equivalent. The lien stays in force while the debt remains but the property is actually owned by the mortgagor. While the mortgagee has legal possession of the property, he does not own it or have the title to it, the legal owner is the mortgagor.
The only time the mortgagee has any rights over your property is in the event that you default on payments when he can sell it to recover the outstanding debt. In the unfortunate event that requires the property to be sold or Foreclosed, then the case will need to be presented to the courts for approval. This is done in order for it to be considered legal; this type of foreclosure is referred to as a judicial foreclosure. If you were unsure about the definition before and the subject surrounding it, I trust this information has been of use.
