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4 min read May 11, 2023

Mortgagor: Definition And Details

Every mortgage story revolves around the Mortgagor and the Mortgagee. The mortgagor is the home buyer who takes out a loan to fund the home purchase. The mortgagor must provide clear documents to the mortgagee (lender) in order to qualify for a mortgage.

What Is A Mortgagor?

A mortgagor is a person who borrows money to purchase a property and agrees to repay that over a period of time. In some cases, the mortgage is jointly owned with the co-mortgagor.

What is a Co-Mortgagor?

A co-mortgagor is the second owner of the loan. A co-mortgagor and the primary mortgagor share ownership of the property legally.

During the application, the co-borrowers income, credit history, and financial information are also taken into consideration. Adding a co-mortgagor to the application increases the credibility of the loan approval.

What are the Mortgagor’s Responsibilities?

The borrower has to fulfill certain responsibilities as a mortgagor. These responsibilities typically include

  • Loan Repayment: The Mortgager’s prime responsibility is to make regular payments to the lender as per their agreed terms.
  • Timely Payments: Mortgagor should keep a check on these timely loan payouts in order to avoid late fees and penalties. Doing so would help you maintain a good credit score.
  • Property Maintenance: As a legal owner of the mortgaged property, you need to maintain the property to its best. This would include necessary fixes, maintaining it to a livable condition.
  • Insurance Coverage: You need to maintain property insurance coverage throughout the mortgage tenure. This insurance would help you cover the finance for any property damages or loss.
  • Property Taxes: As a homeowner, you cannot skip paying the property taxes for your mortgaged property. These property taxes contribute towards the good maintenance of the road and the welfare of society.
  • Notifying the Lender: As a mortgagor, you need to inform the lender as soon as there is any change in communication, or employment that may impact your ability to do the payments.

Who is the Mortgagee?

Mortgagee, commonly known as the lender, is the one who lends money to the borrower. The mortgagee can be an individual, bank, or any financial company that provides finance to the applicant.

The mortgagee collects monthly payments from the Mortgagor including the principal amount & interest calculated on the loan.

Mortgagor vs Mortgagee

MoneyThey are the borrowersThey are the lenders
ServicesThey apply for a loanThey approve the loan
PaymentsThey make timely loan paymentsThey collect the monthly payments from the mortgagor
ApplicationThey can be an individual or entityThey can be an individual or entity
Loan AmountThey receive the loan They give the loan

How do Mortgage Loans Work?

Mortgage loan approval can be an overwhelming process for the mortgagor. The application undergoes several stages till it gets approved. A mortgage loan works the following way:

  • Application of the loan
  • Pre-approval of the loan
  • Home Appraisal
  • Loan acceptance
  • Timely repayment of the loan

Different Types Of Mortgages

There are various mortgages available to borrowers benefitting their individual requirements. Below are the most discussed types of mortgages:

  • Conventional Mortgage: It is a type of loan that is not certified by a government agency such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA). This mortgage demands a higher down payment and strict criteria to get approval.
  • Fixed-Rate Mortgage (FRM): In this mortgage, the interest rate remains constant through the loan tenure. It follows the mortgage period of 15 years or 30 years.
  • Adjustable-Rate Mortgage (ARM): In this mortgage, the initial interest rate is fixed for a specific period say 5-7 years only. Later the interest fluctuates due to changes in market conditions.
  • FHA Loan: FHA loan makes homeownership less restricted benefitting first-time buyers. They work on flexible criteria like lower down payment and lower credit score requirements.
  • VA Loan: VA loans are offered to veterans, active-duty military personnel, and their families. VA loans are guaranteed by the Department of Veterans Affairs. These loans do not have strict credit requirements and do not need private mortgage insurance.
  • USDA Loan: USDA loans are designed to encourage homeownership in rural and suburban areas. These loans provide financing for low-to-moderate-income borrowers and may require no down payment. USDA loans also offer low-interest rates and flexible credit requirements.

Bottom Line

A mortgagor is a borrower who borrows money to purchase a property and agrees to repay over a specific tenure. While the mortgagee is the one who lends the money on his terms depending on the borrower’s eligibility.

Frequently Asked Questions

Can mortgagor sell mortgaged property?

Yes, the mortgagor can sell the mortgaged property. Before selling the property it's advisable to first check with the lenders term regarding the same.

Is the lender the mortgagee or mortgagor?

The lender is the mortgagee.

What happens to a mortgage if the mortgagor dies?

If the mortgagor dies, the co-mortgager will take responsibility for the payments and maintenance. If there is no co-mortgager, then the report may go under the probate process.


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