Mortgage Definition - It May Not Be What you Think

Mortgage Definition - It May Not Be What you Think

 Are you buying a new house?  If so and if you are like most people, you will need the services of a lender...I can suggest a few goods ones that will work hard for you.  Sooner or later the "M" word will be used...and exactly what does Mortgage mean? 

Merriam-Webster defines Mortgage as:  

Mortgage

"A legal agreement in which a person borrows money to buy property (such as a house) and pays back the money over a period of years".  

I think most people have this understanding of what a mortgage is,  and M-W goes on to say : "a conveyance of or lien against property (as for securing a loan) that becomes void upon payment or performance according to stipulated terms", also, "the instrument evidencing the mortgage".  So far so good, but before I give you Merriam-Webster’s second definition let me ask you a question;  Who is giving whom a mortgage?  The bank is giving a buyer a mortgage on the home they want to buy…right?  WRONG!  

Merriam-Webster’s second definition is:  "to give someone a legal claim on property that you own in exchange for money that you will pay back over a period of years".

Any clearer now?  The buyer is giving the party (loaning the money) a legal claim on that property securing the debt.  The buyer is voluntarily placing a lien on their own property in favor of the creditor should the buyer default.   So what actually is taking place is that the buyer is “giving” the creditor (typically a bank or lender) a mortgage.  The lender is the “mortgagee while the buyer is the “mortgagor”.

I found this great HUD web portal that lists most real estate terms in use and gives definitions.

Content originally published at....http://nicktpappas.com/?p=2194 

image courtesy Stuart Miles/freedigitalphotos.net

Visit Your Huntsville Real Estate Resource

Serving: Anslee Farms, Bell Tower, Bishop Farms, Bradford Farms, Bridgefield, Canebrake, Chase Shadow, Cherokee Ridge, Clifts Cove, Edgewater, Emerald Forest Condo, Foxfield, Greystone Estates, Hampton Cove, Harvest, Highland Lakes, Jones Valley Estates, Kelly Plantation, Knox Creek, Lake Forest, Ledges of Huntsville Mountain, Mandolin, Maxwell Place, MidTowne on the Park, Newby Plantation, Olde Cobblestone, Overland Trace, Pebble Brook, Rainbow Landing, Rock Creek, Shadow Brook, Spencer Green, Stavemill Estates, The Bridges on the River, The Villas at Madison, Towne Lakes, Villas at Jones Valley, Walden Preserve, West Highlands, Whitehall, Village of Providence and more.