In a credit relationship, to secure the performance of an obligation, one party must mortgage its property to the other party. The English name of the mortgage is called Mortgage. To better understand the term Mortgage is what? as well as the characteristics and classification of this form, please follow our article below.

Watching: What is Mortgage?

What is Mortgage?

What is Mortgage? As shared above Mortgage is a term that refers to a form of mortgage. Mortgage of a property is a party that uses its property to perform a civil obligation and does not deliver this property to the mortgagee. This form is clearly defined in the 2015 Civil Code. Accordingly, the mortgagor will be the holder of the mortgaged property. The parties may agree on whether or not to hand over this collateral to a middle third party.

Mortgage is a term for a form of mortgage

Features of mortgage

What is Mortgage? To distinguish mortgage from other forms, in addition to the concept, you also need to understand its characteristics.

In a mortgage there is no transfer of property status. Instead, the mortgagor only transfers to the bank a document certifying the mortgagor’s ownership of the property. During the transfer of this decision, the mortgagor still has the right to use the property.

The assets used in the mortgage are mainly real estate, motor vehicles, circulating goods, etc.

In the case of mortgage of all real property along with other movables and ancillary objects, all auxiliary objects shall be mortgaged. collateral, the collateral will include auxiliary objects. Except the two parties have other agreements.

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– Is a type of future assets.

The mortgage of land use rights will be done in accordance with the law.

Mortgagor is the party entitled to keep the mortgaged property. Whether it is handed over to a third party to keep or not depends on the agreement of the parties.

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What are the characteristics of a mortgage?

Mortgage classification

After understanding what Mortgage is and its characteristics, it is also necessary for you to equip yourself with knowledge of mortgage classification. Mortgages are classified according to the content, number of mortgages, property properties and origin of collateral. As follows:

Based on mortgage content

Legal mortgage: A form of mortgage in which the borrower agrees to transfer the ownership of the mortgaged property to the mortgagee in the event of failure to repay the debt. With this type of mortgage, the mortgagee has the right to sell or lease the mortgagor’s property without carrying out legal proceedings. The downside of this type of mortgage is the cost.

– Fair mortgage: With this form, the mortgagee only keeps the property ownership papers or the certificate of land use rights of the mortgagor. The handling of assets will be based on the agreement of both parties.

There are many ways to classify mortgages

Based on number of mortgages

– First mortgage: Mortgage of property to secure the obligation for the first debt or first loan.

Second mortgage: The borrower uses the difference between the first loan and the value of the property as collateral. This property is a security for the second, third, and so on.

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Based on properties

– Entire mortgage: Even the appendage is also collateral.

Partial mortgage: The mortgagor uses only part of the property as collateral.

Based on the origin of the mortgaged property

– Direct mortgage: Using assets formed from loan capital

– Indirect mortgage: Collateral is different from assets formed from loan capital.

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What is Mortgage? Hope the above article has provided you with detailed information about this type of mortgage. To update more useful information, do not forget to follow our website.