Mortgagor vs. Mortgagee: What’s the Difference
When diving into the world of real estate financing, it's essential to understand key legal and financial terms. Among the most commonly confused are “mortgagor” and “mortgagee.” Though they sound similar, these two terms define very different roles in the mortgage process. Understanding the difference between a mortgagor and a mortgagee is crucial for anyone dealing with home loans, whether you're a first-time homebuyer or a seasoned investor. What is a Mortgagor? The mortgagor is the borrower in a mortgage agreement. This person (or entity) takes out a loan from a lender to purchase real estate. In doing so, the mortgagor pledges the purchased property as collateral for the loan. Until the loan is paid off, the borrower agrees to make regular payments usually monthly that cover the loan principal, interest, taxes, and insurance. Key responsibilities of the mortgagor include: Making timely monthly payments Maintaining the property Complying with the terms of the loan Ensur...