Know all about Mortgage
Mortgage is a transfer of an interest
in a 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 agreement, which
may give rise to a pecuniary liability.
The person borrowing and transferring his
interest in an immovable property to the lender is the mortgagor.
The lender is the mortgagee. The funds lent against which the
property is used as security is the mortgage money. The instrument
by which the transfer is effected is called a mortgage-deed.
Types of mortgages
Simple Mortgage
Without delivering possession of the mortgaged
property, the mortgagor binds himself personally to pay the mortgage-
money, and agrees, expressly or impliedly, that in the event of
his failing to pay according to his contract, the Mortgagee shall
have a right to cause the mortgaged property to be sold for satisfaction
of the mortgaged debt.
Conditional Mortgage
The mortgagor presumably sells the mortgaged
property on condition that on default of payment of mortgage money
on a certain date, the sale shall become absolute or on condition
that on such payment being made the sale shall become void or
on condition that on such payment being made the buyer shall transfer
the property to the seller.
Usufructuary Mortgage
The mortgagor delivers possession or expressly
or by implication binds himself to deliver possession of the mortgaged
property to the mortgagee and authorizes him to retain such possession
until payment of the mortgage-money. The mortgagee is allowed
to receive the rents and profits accruing from the property or
any part of such rents and profits and to appropriate the same
in lieu of interest or in payment of the mortgage money, or partly
in lieu of interest or partly in payment of the mortgage money.
English Mortgage
The mortgagor binds himself to repay the mortgage-money on a certain
date, and transfers the mortgaged property absolutely to the mortgagee,
but subject to a provision that he will re-transfer it to the
mortgager upon payment of the mortgage-money as agreed.
Mortgage by deposit
of Title deeds or Equitable Mortgage
A person delivers to a creditor or his agent documents of title
to immovable property with intent to create a security thereon.
It can be conducted in a town where the state government concerned
may, by notification in the Official Gazette, specify in this
behalf.
Anomalous Mortgage
A mortgage, which is not any of the above, is called an anomalous
mortgage.
Title Deeds to be necessarily registered
A mortgage other than a mortgage by deposit of title deeds can
be effected only by a registered instrument signed by a mortgagor
and attested by at least two witnesses.
Right to redeem and Suit of redemption
After making the entire payment of the loan amount, the mortgagor
has a right to require the Mortgagee to deliver the mortgage deed
and other title deeds and if the Mortgagee is in possession of
the mortgaged property, to deliver possession thereof either to
back to the mortgagor or such third person as he may direct. Such
a right is called right to redeem and a suit to enforce is called
a suit of redemption.
Transfer of Mortgage
The mortgagor may direct the mortgagee to transfer the property,
which he is in possession of, to a third party after all the dues
have been paid off. The document to be executed for this is called
transfer of mortgage in which the mortgagee is called the transferor
and the third party is the transferee.
Situations when the mortgagee can exercise
the right to sell the property
A mortgagee can exercise his power to sell or concur in selling
the mortgaged property, in default of payment of the mortgage-money
without the intervention of the court in the following cases:
There is also a provision made for payment
of the amount due in the event in the mortgagor failing to pay
interest amounting to more than Rs 500/- which remains in arrears
for three months.
Mortgagor to bear all costs of mortgage
The mortgagor will have to pay all costs
of and incidental to the mortgage including the mortgagee's solicitor's
or advocate's cost. If he has engaged his own solicitior or advocate,
he will also have to pay his costs. If the transaction is brought
about by a broker, the mortgagor has to also bear the brokerage
cost.
