The Six Types of Mortgage You Must Know
1. Simple Mortgage
In a simple mortgage, the ownership of the mortgaged character is not transferred from the mortgagor to the mortgagee. In the time of action of repaying the loan, if the mortgagor fails to do so, the mortgagee can sell the character and retrieve the loan amount from the sale.
2. Mortgage By Conditional Sale
When a person decides to take a mortgage on his immovable character as a security, the ownership of the character is not transferred, but the mortgagee, under certain conditions, can sell the character. This is called mortgage by conditional sale. It method that the mortgagor has conditionally sold his character to the mortgagee. This conditional sale will become an absolute sale if the mortgagor fails to repay the loan. On the flip side, if the mortgagor repays the money on or before the due date, their character is completely recovered from the mortgagee and consequently can’t be sold by anyone else. A mortgagee enjoys more benefits in this kind of mortgage than a simple mortgage. In mortgage by conditional sale, the mortgagee can own the character thoroughly if the money is not repaid to him.
3. Usufructuary Mortgage
In this kind of mortgage, except using the character as a security, the mortgagor also physically delivers the character to the possession of the mortgagee until the loan amount is repaid. So, only when the loan amount is repaid can the mortgagor get back his character. During this period, the mortgagee is entitled to collect the rent and other profits of the character.
4. English Mortgage
In this kind of mortgage, the mortgagor must agree to surrender his character to the absolute possession of the mortgagee on the condition that if the mortgagor repays the loan amount on or before the due date, they can completely retrieve their character from the mortgagee.
5. Mortgage By place Of Title Deed (Equitable Mortgage)
In this kind of mortgage, the mortgagor agrees to render the title document of the character to the mortgagee. This is done so as to create a security for the mortgagee in order to obtain the loan amount.
6. Anomalous Mortgage
An anomalous mortgage is completely different from any of the mortgages discussed above. The main characteristic of this mortgage is that it includes simple mortgage and usufructuary mortgage by conditional sale. However, it is important to observe that with this kind of mortgage, possession may or may not be delivered.
Now that you aware of the various mortgages, go ahead and get yourself one. Remember to go in for the right mortgage as per your house requirements, and do your homework before you blindly obtain a mortgage.