What is a Mortgage Loan?

A mortgage loan is a loan secured by an individual on realty property, in which a note guarantees the terms of the loan and the repayment details. This means that you, the borrower, enter into an agreement with the lending organization promising to pay back the terms of the loan. A mortgage loan is not a debt, but rather the security for a debt; that is, you as the owner of the property essentially sell a percentage of the interest in the land to the mortgage lender in exchange for a loan of money. The owner will eventually pay this loan back to repurchase the interest sold to the lender. The mortgage loan is a form of security for the lender.

Mortgages are very common all over the world as a means for individuals to purchase property, since few people have enough liquid assets to purchase property outright. If you are interested in buying a house but don't have the cash to immediately buy it, you can enter into a mortgage with a bank or other lending organization as a way to purchase a home now, and, through responsible repayment, eventually own the property outright.

Mortgage Instruments

There are two main mortgage instruments that make up the mortgage: the mortgage, and the deed of trust.

• The mortgage creates a lien on the property. A lien is a security interest issued by a court to guarantee the payment of a debt. This helps to ensure that you repay the loan.
• The deed of trust is an agreement between the borrower and a trustee, who represents neither the borrower nor the lender. Usually, the trustee is a title company.

These two instruments are meant to ensure that you pay back your loan promptly.

Contact Us

If you are interested in securing a mortgage and would like legal assistance, or if you have any other questions about mortgages, contact the Maryland mortgage modification lawyers of Chaifetz & Coyle, P.C., by calling 443-546-4608.