Mortgage Advice

When a customer offers immovable property like land and a building as security for a loan, charge thereon is created by means of mortgage. Theoretically speaking, mortgage can be defined as the transfer on an interest in specific immovable property for the purpose of securing the payment of money, advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability. In the whole process, the transferor is called mortgagor; the transferee mortgagee; the principal money and interest thereon, the payment of which is secured are called the mortgage money and

instrument, if any, by which the transfer is effected is called a mortgage deed.
The proper understanding of the above-mentioned terms is very important when considering any kind of mortgage advice. On the basis of these terms, a mortgage is the transfer of an interest in the specific immovable property and differs from sale wherein the ownership of the property is transferred. Transfer on an interest in the property means that the owner transfers some of the rights of ownership to the mortgagee and retains the remaining rights with himself. For example, a mortgagor retains the right of redemption of the mortgaged property.

It is worth mentioning that if there is more than one co-owner of an immovable property, every co-owner is entitled to mortgage in his share in the property. The property intended to be mortgaged must be specific. In other words, it can be described and identified by its location, size and other factors. The object of transfer of interest in the property must be to secure a loan or to ensure the performance of an engagement that results in monetary obligation. Thus the property may be mortgaged to provide security to the creditor in respect of the loans already taken by the mortgagor or in respect of the loans which he intends to take in future.

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