Mortgage and Its Types

A mortgage is a method in which land or any other valuable thing is used as a guarantee to have a loan on it. It is a kind of agreement between two parties, the one who takes a loan and the other who gives a loan. If the debtor fails to pay back the loan, the debtor has the right to keep his property. The mortgage helps one to get a property without paying full value.

This blog is written to let people know about the different types of mortgage that can be helpful for them in the long run. Types of mortgage are to be discussed below

Simple Mortgage

In a simple mortgage, the mortgagor promises to himself to pay the loan within a specific period and if he fails to do so, the debtor will have the right to own his property.

Mortgage by Conditional Sale

In this type of mortgage, a condition is set between the debtor and creditor before agreeing on the mortgage. The condition can be like, if the debtor fails to pay the loan, the creditor will have certain authorities, or the sale of the property will be unavoidable etc

Usufructuary Mortgage

In this type of mortgage, the debtor has to give the possession of the property to the creditor until he has not paid the loan fully. It includes principal and interest amount as well.

English Mortgage

In English mortgage, the mortgagor pledges to pay the mortgage amount on a particular date and also transfers the possession to the creditor. When the debtor pays the mortgage amount back, the creditor has to transfer the possession back to that person.

Equitable Mortgage

Equitable Mortgage is that kind of mortgage in which the mortgagor gives original deed title to the back as a security for the loan. In this mortgage, one has to deposit deed title and original documents to get the loan.

Registered Mortgage

In this type of property, all the legal documentation and requirements are to be fulfilled to create the mortgage. In this mortgage, the debtor willingly gives all the rights to the bank to occupy the property if he fails to pay the loan.

Balloon Mortgage

A balloon mortgage is a kind of loan that has a period in stating of less or no payment and pays the remaining payment within a specific period. The creditor does not authorize the debtor in this mortgage.

Reverse Mortgage

This kind of mortgage as is clear by the name functions in reverse mode. The lender pays monthly installments to the borrower. This is the best kind of mortgage for people who are retired. It will help them meet their financial needs.

Anomalous Mortgage

This mortgage is a mix of two mortgages e.g. a mix of simple and usufructuary mortgage or it followed by conditional scale mortgage. It is easy and takes less time in creation. It can be done without any public notice so that the borrower would not come in the public notice.