Mortgage Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Mortgage, written in plain English, along with examples of how it is used.

What is Mortgage?

(n) Mortgage is the property or title to a property which has been pledged with a lender to secure the loan taken from such lender. The French word means ‘dead pledge’. Law require registration of the Mortgage. The mortgagee can utilise the property so pledged to recover his legitimate dues from that mortgage agreement.

History and Meaning of Mortgage

The word "Mortgage" originated from the French word "Mort-Gage," which means "Dead Pledge." In medieval times, Crusaders used this type of loan to finance their journeys to the Holy Land. If the Crusaders did not return, the lender would keep the property, hence the term "dead pledge." Today, a mortgage refers to a loan taken out by an individual or entity to purchase real estate property. The property is pledged to the lender as collateral to secure the loan.

Governments require the registration of mortgages to help protect lenders' interests and to ensure that the terms of the mortgage are enforceable. The mortgage process usually involves a detailed contract that sets out the terms of the loan, including the loan amount, interest rate, payment schedule, and a description of the mortgaged property.

Examples of Mortgage

  1. Sarah took out a mortgage to buy her dream home - she pledged the house as collateral to secure the loan.
  2. After losing his job, John started to fall behind on his mortgage payments, and the bank threatened to foreclose on his property.
  3. A real estate investor bought a rental property with a mortgage from a bank and used the collected rents to pay off the mortgage over time.

Legal Terms Similar to Mortgage

  1. Loan: a sum of money borrowed that is usually expected to be paid back with interest
  2. Lien: a legal right that allows a creditor to take possession of a property until a debt is paid off.
  3. Deed: a legal document that transfers the ownership of a property from one person to another.