Montreal is Canada's second largest city. Currently, it is one of Canada's prime spots of development that's why a lot of people now days are opting to relocate there and invest. Majority of the people here are French speaking and is considered to be the largest community to speak French outside of France.
Due to the increasing demands of life these days, many people are opting for getting mortgages. With the development in Montreal, many residents are applying for mortgage loans; this is especially true for those who are just about to buy a house and those who are starting out in life.
A mortgage is a loan that helps you to finance the purchase or acquisition of a real estate. This loan usually have specified and set interest rates and payment periods. The one who borrows money is called the "Mortgagor" and the lender is the "Mortgagee".
The mortgagor gives the mortgagee a lien, which is a legal claim to an asset that is used so that the loan will be secured. This is done as so that the lien would be the collateral for the loan of the mortgagor. Not being able to adhere with the terms and conditions can lead to various consequences, that of course have negative effects.
Mortgage The French Way
Since Montreal is mainly inhabited by French people, mortgage here also runs the French way adhering to French law. That is why they make use of the term "Hypotheque" in their realm of mortgages, unlike other places.
The Hypotheque is a French law. Basically, it states how the mortgage process runs. It is the proper right acquired by the mortgagee over the fixed property that was assigned to him by the mortgagor. It stands as a security for the debt, although it doesn’t necessarily mean that the mortgagee is placed in possession of the property.
There are two ways on how this can come up. First is by the conventional way. This occurs when the mortgagor expresses an agreement about the loan. An example is when the mortgagor expresses the conditions when he acquired the loan like listing the properties that he is willing to risk as payment for the mortgage loan that he is making.
Secondly, there is the legal or implied hypotheque. This type of takes place when it is the law that states the conditions on the mortgage loan. In other words it is also a lien for the whole mortgage loaning process.
If you are not able to pay the mortgage loan that you took. There are penalties that you are subjected to since you are under the agreement of the hypotheque. There are various kinds of penalties for the different loan product types. There are also different ways on how to compute these penalties.
The general way for fixed mortgages is that depending on which is higher; you pay either interest for three months or, the loan rate and current rate for the remainder of the loan term difference.