According to the Section 58(a) of the Transfer of Property Act 1882 “A mortgage is the transfer of interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan , an existing or future debt or performance of an engagement which may give rise to a pecuniary liability.”
"The transferor of the property is called the mortgagor , the person to whom the property is transferred, transferee is called the mortgagee, the principal money and interest of which payment is secured for the time being are called the mortgage -money, and the legal instrument by which the transfer is brought into effect is called a mortgage deed."
What is Mortgage Deed
Mortgage deed is a transfer of interest in some specific immovable property. It is the mortgagor who has the overall interest in the subjected property. It could be understood that there is the transfer of interest, the property is transferred to the mortgagee, and he gains the right to recover the amount of loan. There must be an existence of immovable property, in the true ownership of the Mortgagor. When an agreement for a mortgage is complete and accomplished, the mortgagor and the mortgagee relationship is exhausted, when there is repayment of loan.
Types of Mortgage Deed;
- Simple Mortgage - In case of a Simple mortgage, the possession of the property which is the subject matter is not transferred from mortgagor to the mortgagee. The circumstances in which the mortgagor fails to repay the loan, the mortgagee has the right to sell the property and recover the loan from the sale amount.
- Mortgage by Conditional Sale - As the name itself suggests, conditional sale, the mortgagor sells the property to the mortgagee on certain conditions, which can be entered and understood between the parties.In such case, the mortgagee is a "mortgagee by conditional sale".
- English Mortgage - In this form of mortgage remains bounded to repay the borrowed amount on a date mentioned in the deed. The mortgagor has to transfers the property absolutely to the mortgagee. The transfer in this case is subject to the condition that the mortgagee will re-transfer the property on repayment before the agreed date
- Useufructuary Mortgage - The possession of the mortgaged property is transferred to the mortgagee. The mortgagee continues to receive the benefits from the property (rent, profit, interest, etc) until the repayment of the loan is achieved. The title of the deed remains with the owner.
- Mortgage by deposit of title of deeds - In such mortgage, the mortgagor proceeds and delivers the title document of the property to the mortgagee with an intention to create a security.
- Anomalous mortgage - is a mixture of various types of mortgages.
