Mortgagor
Definition and meaning of Mortgagor in real estate.
A mortgagor is an individual or entity that borrows money from a lender to purchase real estate and pledges the property as collateral for the loan. The mortgagor is the homeowner who signs the mortgage agreement, giving the lender a security interest in the property.
In more detail
In a typical home purchase, the buyer needs financing and obtains a mortgage loan. The buyer, now the mortgagor, retains the title and ownership of the home but grants a lien to the lender. If the mortgagor fails to make the required loan payments, the lender can foreclose on the property to recover the outstanding debt.
Understanding this role is crucial because the mortgagor remains responsible for property taxes, homeowners insurance, and maintenance, despite the lender holding a financial interest in the property.
Key facts
| Category | Mortgages & Financing |
|---|---|
| Also known as | Homeowner or borrower |
| Required by | Lender or mortgagee |
| Watch out for | Foreclosure if payments are missed |
A buyer purchases a single-family home for a typical market price, securing a loan from a local bank to cover the balance. The buyer signs the mortgage document as the mortgagor, while the bank acts as the mortgagee.
Frequently asked questions
What is the difference between a mortgagor and a mortgagee?
The mortgagor is the borrower who pledges the property as security for the loan, while the mortgagee is the lender who provides the funds and holds the lien on the property.
Does the mortgagor own the property?
Yes, the mortgagor holds the legal title and ownership of the property, but the property remains subject to the lender's lien until the mortgage is fully paid off.
Related terms
Sources & references
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