Mortgage Terminology That Everyone Should Know

Mortgage Terminology That Everyone Should Know

Mortgage Terminology That Everyone Should Know
When you​ are searching for or​ reading through any mortgage,​ there are some terms that are vitally important to​ how you​ perceive the​ paperwork .​
If you​ aren't familiar with all of​ the​ terms,​ then you​ might misunderstand what the​ document is​ saying and agree to​ something that you​ might not mean to​ .​
Here are some of​ the​ basic terms that you​ should understand before you​ sign anything:
1 .​
Creditor – this is​ the​ party who is​ selling,​ or​ who holds the​ current deed to​ the​ property that you​ are buying .​
They legally own the​ property and have the​ legal right to​ sell it,​ or​ secure it​ by a​ mortgage .​
This is​ usually the​ mortgage company,​ bank,​ or​ other lending institution .​
The creditor is​ also listed as​ the​ mortgagee or​ lender in​ some cases.
2 .​
Debtor – this is​ the​ party who is​ buying the​ property .​
If you​ are looking to​ purchase the​ property,​ then the​ debtor is​ you​ .​
This party must ensure that they are able to​ repay the​ mortgage to​ the​ creditor before the​ creditor will sign the​ mortgage.
3 .​
Conveyance – this is​ the​ term for the​ legal exchange of​ the​ property from the​ creditor to​ the​ debtor.
4 .​
Hypothecation – this is​ just a​ fancy term for the​ debt that is​ incurred by the​ mortgage .​
This is​ what the​ debtor has when they sign the​ mortgage and turn over the​ money to​ the​ seller of​ the​ property.
5 .​
Redemption – this is​ when the​ mortgage,​ or​ debt,​ is​ paid in​ full.
6 .​
Mortgage by demise – this is​ when the​ creditor assumes ownership of​ the​ property until the​ debt is​ paid in​ full .​
This form of​ mortgage was widely used in​ the​ past,​ but is​ seldom used today,​ and is​ even outlawed in​ some countries.
7 .​
Mortgage by legal charge – this is​ the​ basic type of​ mortgage that is​ available to​ day .​
In this case,​ the​ debtor (or buyer) is​ legally the​ owner of​ the​ property,​ but the​ creditor retains enough rights over the​ property to​ ensure that they will be paid.
There are many more mortgage terms that you​ should be familiar with when searching for a​ mortgage .​
You should make sure that you​ are aware of​ other terms that you​ might need to​ know before you​ head into a​ mortgage broker's office to​ sign any paperwork .​
Hopefully these terms help to​ give you​ a​ little more of​ an​ idea of​ what you​ are signing when you​ do make it​ to​ that part in​ the​ process.

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