ArticleMap.com

How Does A Mortgage Work?

This article is hopefully going to explain many of the things people believe about mortgages that are actually false. For instance, they are often referred to as a Mortgage Home Loans but they aren't actually loans in the traditional sense of the word. 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). What this means is this document is a way for the property to be used to safeguard any potential problems with payment until the house is finally paid for.

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. There are also misconceptions about how they work so below is a description of how the process works. Unfortunately it is our own common use of word like Borrower and Lender that has mislead people into thinking a mortgage is a loan when they should be referred to as Mortgagor and Mortgagee respectively. The security is in fact a lien which means the mortgagee has legal possession of your property until the debt is repaid.

This is the collateral or the security for the mortgagee who has provided the security instrument. Being a legal contract, the lien will be lodged within the records at the county or city courthouse (or a similar public office). While the property is owned now by the mortgagor, the lien cannot be reversed until the amount specified in the debt is paid off. What this means is that even though the mortgagee has possession of the mortgage he is not the owner of the property nor does he have the title.

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. This process has many names and in the United States it is referred to as foreclosure but this does need to go through the courts. To ensure that everything is legal and above board, the court will place a ruling on the disposal in a process called judicial foreclosure. This is only a short introduction as the subject is much more complex but this information should make this important issue much clearer.

Article Source: http://www.articlemap.com

John Andrews/Steven are the owners of the No Foreclosure site. Do sign up for their newsletter and find out the amazing insider secrets on how to save your home from foreclosure if you do have a mortgage. Don't let it become too late before taking action.

Please Rate this Article

Not yet Rated

Click the XML Icon Above to Receive Debt Consolidation Articles Via RSS!

Additional Articles From - Home | Finance | Debt Consolidation

	Print This Article
	Post Comment
	Add To Favorites
	Email to Friends
	Ezine Ready

Submit Articles
Member Login
i Top Authors
Most Popular Articles
Submission Guidelines
Ezine Notifications
Article RSS Feeds

Press Release
About Us
Link To Us
Contact Us
Privacy Policy
Terms of Service

Highly Recommended:

Sponsored Ads:

Recommended Hosting

Related Sister Site:
Submit Health Articles Now