MORTGAGES – REVISION NOTES
Borrower = Mortgagor
Lander (Bank / Building Society) = Mortgagee
Loan to Value Ratio / Percentage = The percentage (of the property’s value) lent
by the Lender
Equity – Each party’s share in the Value of the property
Section 85 Law of Property 1925 – The only way to create a legal security over
registered land “charge by way of legal mortgage”.
This does not grant an estate in the land to the mortgagee, it gives the mortgagee a
legal interest in the land:
Section 1(2)(c) Law of Property Act 1925 – It gives the mortgagee a legal interest
in the land and gives him all the rights he needs.
Section 27(2) Land Registration Act 2002 – It is a registrable disposition. Failure to
register a mortgage means that tit will take effect in equity only.
What Happens When A Borrower Takes Out A Mortgage?
Borrower (Mortgagor) - Remains the legal owner
Lender (Mortgagee) – Obtains a legal interest which must be registered at the Land
Registry under Section 27 Land Registration Act 2002.
Mortgagor’s rights are called the “Equity of Redemption” and include the right to
redeem the mortgage.
Redeem – Pay off the mortgage. If you pay it off, it will be taken off the register.
Mortgage will set out a “legal date for redemption”, often no more than one month
after the date of the mortgage.
Borrower = Mortgagor
Lander (Bank / Building Society) = Mortgagee
Loan to Value Ratio / Percentage = The percentage (of the property’s value) lent
by the Lender
Equity – Each party’s share in the Value of the property
Section 85 Law of Property 1925 – The only way to create a legal security over
registered land “charge by way of legal mortgage”.
This does not grant an estate in the land to the mortgagee, it gives the mortgagee a
legal interest in the land:
Section 1(2)(c) Law of Property Act 1925 – It gives the mortgagee a legal interest
in the land and gives him all the rights he needs.
Section 27(2) Land Registration Act 2002 – It is a registrable disposition. Failure to
register a mortgage means that tit will take effect in equity only.
What Happens When A Borrower Takes Out A Mortgage?
Borrower (Mortgagor) - Remains the legal owner
Lender (Mortgagee) – Obtains a legal interest which must be registered at the Land
Registry under Section 27 Land Registration Act 2002.
Mortgagor’s rights are called the “Equity of Redemption” and include the right to
redeem the mortgage.
Redeem – Pay off the mortgage. If you pay it off, it will be taken off the register.
Mortgage will set out a “legal date for redemption”, often no more than one month
after the date of the mortgage.
