The term ‘Mortgage’ consists of two words ‘Mort’ and ‘Gage’. Mort which means ‘ a place of public sale and ‘Gage’ means ‘A pledge’. In this way, mortgage means a pledge made at a place of public sale.

Definition of mortgage –

Section 58(a) of the Transfer of Property Act 1882 defines Mortgage as “A mortgage is the transfer of an interest in 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 engagement which may give rise to a pecuniary liability. The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of which payment is secured for the time being are called the mortgage-money, and the instrument (if any) by which the transfer is effected is called a mortgage-deed.

Essential conditions of a mortgage:

1. There is a transfer of interest to the mortgagee.

2. The interest created in specific immovable property.

3. The mortgage should be supported by consideration

What is the purpose of the Mortgage Deed?

• The mortgage deed’s first and most important obligation is to identify the parties to the deed
• The lender’s rights are enforced in court by the deed. It guarantees that if the borrower defaults or misses a payment, the lender will be compensated by selling the property.
• If the mortgagor refuses to pay or breaks the conditions of the contract, the mortgagee has the power to take action on the property.
• The deed contains a comprehensive inspection of the property’s interest and title. It assists in determining who is the legal owner of the mortgaged property.
• The mortgage deed aids in determining the loan amount and interest rate.
• If stipulated in the Contract, the mortgage deed also grants the mortgagee the right to take possession of the property.
• The mortgage deed serves as proof that ownership of the property has been transferred to the lender.

What are the benefits about mortgage deeds?

Once you opt for a secured loan, such as a mortgage loan, the lender knows they’ll get their money back, whether it’s through your repayment or the purchase of the property. If you don’t grasp the conditions of your mortgage, you can end up paying more than you need to, or you might misinterpret the provisions and lose your home.

When you enter into a legal deal with another person or entity, you must conduct your own due diligence. You must be aware of and comprehend your legal obligations, their scope, and the contract’s privileges and restrictions. You could forfeit your property if you don’t keep your half of the bargain, which could be a big problem for you.

Taking full advantage of your mortgage loan, you must first study, analyse, and thoroughly go over the mortgage deed prior signing the dotted lines. “You’re never smarter for not understanding something,” goes the adage, and this couldn’t be more accurate in situations involving your money and possessions.

The Mortgage Process

Would-be borrowers begin the process by applying to one or more mortgage lenders. The lender will ask for evidence that the borrower is capable of repaying the loan. This may include bank and investment statements, recent tax returns, and proof of current employment. The lender will generally run a credit check as well.

If the application is approved, the lender will offer the borrower a loan of up to a certain amount and at a particular interest rate. Home buyers can apply for a mortgage after they have chosen a property to buy or while they are still shopping for one, a process known as pre-approval. Being pre-approved for a mortgage can give buyers an edge in a tight housing market because sellers will know that they have the money to back up their offer.

Once a buyer and seller agree on the terms of their deal, they or their representatives will meet at what’s called a closing. This is when the borrower makes their down payment to the lender. The seller will transfer ownership of the property to the buyer and receive the agreed-upon sum of money, and the buyer will sign any remaining mortgage documents. The lender may charge fees for originating the loan (sometimes in the form of points) at the closing