view current
Real Estate Investments instantly.

Get an email or an
RSS Feed sent to you automatically.

Email Subscription

Delivered by FeedBurner

RSS Subscription

  • What's RSS?
  • How do I subscribe?

Sign up for RSS   Sign up!


Mortgagor vs Mortgagee

Many people are confused about mortgagor vs mortgagee. Years ago, when I bought my first home I was overwhelmed by the lingo in mortgage contracts. Especially, since some terms are used interchangeably. Depending on the state you live in a mortgagor might also be referred to as a consignor or grantor.

The difference between mortgagor vs mortgagee is the first refers to a person who is borrowing money, while the second is the individual lending money. A good way to remember is that mortgagor, consignor, and grantor all have the letter 'o' just like borrower. The terms mortgagee, consignee, and grantee have the letter 'e' just like lender.

Any time a person takes out a home mortgage loan they must sign a promissory note to record their promise to pay. These contracts are legally binding, so mortgagors should always read entire documents before signing.

Mortgage notes provide details of the principal, interest rate, payment dates, installment amounts, default clause, prepayment penalty, and maturation date.

Loan principal refers to the amount provided to buy the house. Interest is assessed on the principal balance. Interest rates are determined by mortgagors' credit scores. People with pristine credit pay lower rates than those with average or good credit.

Prepayment penalties are usually included, but not always. The information is provided in the Truth in Lending (TIL) statement of established loans, as well as the Good Faith Estimate provided after receipt of a loan application.

There are pros and cons to entering into a loan that includes a prepayment penalty clause. While these loans usually have a lower interest rate, mortgagors could lose money if they sell their house or pay off the loan early.

The biggest mistake most first time home buyers make is failing to shop around for the best home loan. Comparison shopping can help you obtain reduced closing costs and interest rates. Saving as little as .25 percent can put thousands in your pocket over the course of 30 years.

There is little doubt that buying a house is intimidating, but becoming educated about the process will boost your confidence and allow you to make smart financial decisions.

There are many places to learn about mortgage loans. Simon Volkov is a great place to start. Other options include the Department of Housing and Urban Development (HUD), Fannie Mae and Freddie Mac, and the FDIC which offers a consumer's guide to buying houses with a low down payment.

There is no need to pay for home buying courses. Everything you need to know can be found online or at local libraries, and by talking with real estate agents, bankers, or mortgage brokers.

For most people, buying a house is the biggest investment they will ever make. It only makes good sense to learn everything needed to set your self up for success. Otherwise, you could end up losing the property to foreclosure and causing serious harm to credit ratings.

Get started on the right foot by learning the responsibilities associated with being a homeowner. Visit our blog to learn about the different kinds of homes for sale; how to apply for a home loan; and ways to buy a house with bad credit.