In real estate, the terms “mortgagor” and “mortgagee” are used to refer to the two main parties involved in a mortgage loan. Here’s a simple explanation:
- Mortgagor:
- Who they are: The mortgagor is the borrower.
- What they do: They take out a mortgage loan to buy a property. In other words, they promise to pay back the loan to the lender.
- Role in the transaction: The mortgagor is the person or entity that owns the property and uses it as collateral for the loan.
- Mortgagee:
- Who they are: The mortgagee is the lender.
- What they do: They provide the loan to the borrower to buy the property. In other words, they lend money to the mortgagor and in return, they get a lien on the property.
- Role in the transaction: The mortgagee is usually a bank or financial institution that holds the mortgage and has the right to foreclose on the property if the borrower fails to repay the loan.
Key Points:
- Mortgagor = Borrower: The person who takes out the loan and buys the property.
- Mortgagee = Lender: The entity that provides the loan and holds the mortgage.
Here’s a simple way to remember: “Mortgagor” ends with “or” like “borrower”, and “mortgagee” ends with “ee” like “receiver” (of payments).
