| Mortgage is a form of hypothecation of property to a | | | | of borrowing are annual percentage rate (APR) or |
| bank as a security for a loan. The transferor is called a | | | | lender police effective annual rate (LPEAR). An |
| mortgagor, the transferee a mortgagee, the principle | | | | investor borrows funds to diversify investment. The |
| amount and interest are called as mortgage money | | | | different types of mortgage include simple mortgage, |
| and the instrument by which the transfer is affected is | | | | mortgage by conditional sale, usufructuary mortgage, |
| called a mortgage deed. Mortgage of property gives | | | | English mortgage, Mortgage by deposit of title deeds |
| the lender a right to acquire and sell the property in | | | | and Anomalous Mortgage. |
| case of default by the borrower in repayment of the | | | | The two main types of mortgage are repayment and |
| loan and other dues as per the agreed terms and | | | | interest mortgages. In the interest mortgage you can |
| conditions. It creates a legally binding contract between | | | | make monthly repayments for a said period but this |
| the parties. | | | | will only cover the interest of your loan. The option to |
| A mortgagee has a right to sue the mortgagor if the | | | | pay interest only lasts for a specified period, usually 5 |
| mortgaged property is totally or partially destroyed. | | | | to 10 years. Borrowers have the right to pay more |
| The mortgagee must have given the mortgagor a | | | | that interest if they want to. If the borrower wants to |
| reasonable opportunity to provide further security to | | | | pay only interest every month during interest period, |
| render the security sufficient and the mortgagor has | | | | the payment will not include any repayment of principle. |
| failed to do so. A mortgage is a loan you take out to | | | | The result is that the loan balance will remain |
| buy property. Most banks and building societies offer | | | | unchanged. In Repayment Mortgage, principal as well |
| mortgages, as well as specialist mortgage lending | | | | as interest amount is re-paid every month. In this type |
| companies. If you change lenders but don't move | | | | of Mortgage the loan amount decreases over time |
| home it's referred to as a remortgage. | | | | and once the last payment is done the property is |
| In certain countries like U.K. Australia there is more | | | | yours. The mortgage amount is usually paid in 25 |
| demand for homes. The two ways of measuring cost | | | | years. |