A mortgage loan means the transfer of the interest of specific immovable property for securing the payment of the loan. It is a legal assurance. Which is given to the lender. After the repayment of the debt, the property will return to the borrower.
It is a written contract between the borrower (mortgagor) and the lender (mortgagee).
It is a transfer of an interest in a specific mortgage property.
Its main purpose is to secure debt.
Its documents must be registered.
A minor borrower cannot do this contract.
The mortgage contract is signed by the mortgagor and attested by the witness.
The possession of the property remains with the borrower.
TYPES or KINDS :
Following are the important kinds :
1. Simple Mortgage :
In this case, the borrower keeps the possession of the property in his hand. He is personally responsible for the payment of the debt. If he fails to repay the debt then the lender has the right to obtain the decree for the sale of the property. It is called a simple mortgage.
2. Usufructuary Mortgage :
In this mortgage, the borrower (mortgagor) actually delivers the possession of the property to the lender (mortgagee). He can use it or rent it out but after repayment of the loan, the possession is transferred back to the mortgagor.
3. English Mortgage :
In this case, ownership and possession both are transferred to the mortgagee on the condition that the loan will be repaid on a certain fixed date. After the repayment of the loan, it is returned.
4. Equitable Mortgage :
The mortgagor (borrower) deposits the title deed of property as a security to the lender. From the banker’s point of view, it is not popular.
5. Anomalous Mortgage :
In this mortgage rights and liabilities of both, the parties are strictly determined according to the contract of the mortgage deed.
6. Mortgage By Conditional Sale :
The borrower sells the property on the condition that if he fails to repay the loan then the lender (mortgagee) will obtain the absolute proprietorship of the property. On the other side if he returns the loan then the property will be restored.
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