A mortgage loan or, simply, mortgage is used either by purchasers of real property to raise funds to buy real estate, or alternatively by existing property owners to raise funds for any purpose, while putting a lien on the property being mortgaged.
Mortgage loans in India are available under 6 different mortgage types. Under Section 58(a) of the Transfer of Property Act, 1882, mortgage’s definition stands as a specific immovable property’s transfer of ownership to secure payment of funds against it, extended as a mortgage loan in the form of credit.
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6 Types of Mortgages in India
Here, the borrower simply mortgages the immovable asset personally to avail a loan. The lender has the right to sell mortgaged property in case of repayment failure.
In this, the property’s possession is transferred to the lender who can receive rents or profits from it without creating any personal liability on the borrower.
It establishes personal liability on the borrower, and the mortgaged property is transferred to the lender on the condition that successful loan repayment will lead to recovery.
Mortgage By Conditional Sale
Here, a mortgagor sells his/her property with terms that it becomes effective if he/she defaults in repayment but turns void on successful repayment.
Mortgage By Title Deed Deposit
The borrower deposits the title deed of the property to be mortgaged with the lender against the loan to avail.
A mortgage that doesn’t come under any of the above mortgage types is an anomalous mortgage.