Mortgage documents are those documents which are made when a party loans money from another party on real property. A mortgage document is also known as deed. These documents are legal in nature which means that if any of the two parties does anything which violates the terms and conditions of the mortgage, then that party can be held at fault under law.
A mortgage document is like a loan document since a mortgage too has an interest rate which reflects the lender’s risk and the time deadlines when the loan must be paid off completely along with the interest. There are two different kinds of mortgages, the first being the fixed rate mortgage where the principal amount and the interest rate remain same throughout the duration of the mortgage and the second one being the adjustable rate mortgage where the interest rate may change with the change in the index.
A mortgage document must consist of a few points which are compulsory to mention and these points are as following:
- The name and addresses of the borrower and the lender of the mortgage.
- The details of the mortgage and the purpose in a specified way.
- The effective date of the mortgage and the duration of contract.
- The financial aspect of the mortgage which includes the principal amount and the interest rate.
- The formulae which are used for the calculations involved in the mortgage document.
Any mortgage document is a formal document therefore this format mentioned should be followed in order to get a proper mortgage document.
Posted in Mortgage Documents