They are part of a legal agreement that conveys conditional ownership of an asset from its owner (the mortgagee) to a lender (the mortgagee) as collateral for a loan. The lender's collateral interest is recorded in the title document register for public information, and is voided when the loan is paid in full.
Virtually any legal property can be mortgaged, although real property (land and buildings) are the most common. When personal property (appliances, cars, jewelry, etc.) is mortgaged, it is called a personal mortgage. In the case of equipment, real estate and vehicles, the right to possess and use the mortgaged item normally remains with the mortgagor, but (unless specifically prohibited in the mortgage contract) the mortgagor has the right to take possession Procedure) at any time to protect your safety.
In practice, however, courts generally do not automatically apply this right when it comes to housing and restrict it to a few specific situations. In the event of a default, the mortgagee may designate a receiver to manage the property (if it is business property) or obtain a foreclosure order from a court to take possession and sell it. To be legally applicable, the mortgage must be for a defined periodand the mortgagor must have the right of redemption in the payment of the debt on or before the end of that period. Mortgages are the most common type of debt instrument for several reasons, such as a lower interest rate (because the loan is secured), straightforward, standard procedure, and a reasonably long repayment period. The document by which this arrangement is made is called a mortgage bill of sale, or simply a mortgage.
Mortgages are like any other financial product in that their supply and demand will change depending on the market. For that reason, sometimes banks can offer very low interest rates and sometimes they can only offer high rates. If a borrower agreed to a high interest rate and finds after a few years that rates have dropped, he can sign a new agreement at the new lower interest rate after jumping a few hoops though, of course. This is called "refinancing."
