Mortgage -an overview
By admin | November 26, 2007
A mortgage is essentially an alienation method of using property (real or personal) as security for the payment of a debt. The term itself (from Law French, lit. dead pledge) is in reference to the legal device used for this purpose, but it is also commonly used to refer to the debt secured by the mortgage, the mortgage loan.In most legal jurisdictions mortgages are predominantly associated with loans secured on real estate rather than other property (such as ships) and in some cases only land may be mortgaged. Setting up a mortgage is often seen as the preferred method by which individuals and businesses can get hold of residential and commercial real estate without the need to pay the full value instantly.
In most countries it isn’t out of the ordinary for home purchases to be funded by a mortgage on another property. In countries where the demand for home ownership is highest, strong domestic markets have developed, notably in Spain, the United Kingdom and the United States.
In common law, a mortgage was basically a conveyance of land that on its face was absolute and complete and it conveyed a fee simple estate. But it was in fact conditional, and would be of no effect if certain conditions were not met (usually, but not necessarily, the repayment of a debt to the original landowner). Hence the word “mortgage,” Law French for “dead pledge;” that is, it was absolute in form, and unlike a “live gage”, was not entirely or partially, conditionally dependent on its repayment solely from raising and selling crops or livestock, or of simply giving the fruits of crops and livestock coming from the land that was mortgaged. The mortgage debt remained in effect whether or not the land could successfully produce enough income to repay the debt. In theory, a mortgage required no further steps to be taken by the creditor, such as acceptance of crops and livestock, for repayment.
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