The mortgage is a security interest in real estate. Unlike the pledge, which is a security interest in movable property, the mortgage is a security interest that affects immovable property to fulfill an obligation.The mortgage is always indivisible.
What does the mortgage consist of;6 Types OF Mortgages
Mortgages may be divided into three general classes: mortgages for monies loaned, purchase-money mortgages, and building-loan mortgages.
Mortgages for Money.
Loaned Mortgages for moneys loaned are sometimes referred to as straight bond and mortgage loans. The person who borrows the money gives a mortgage on his property as security for the repayment of the loan.
Purchase-money mortgages are those given by purchasers to sellers in part payment of the purchase price. In some cases a purchase-money mortgage has superiority over other liens on the property.
Building-loan mortgages are those by which the total amounts of the mortgage loans are advanced in installments as the work progresses on improvements to real estate. A building-loan mortgage may be used for a new house or for the renovation of an old house.
A building-loan agreement is executed and filed with a mortgage; it provides that advances are to be made according to a schedule, and that on the com-pletion of the building the lender will lend to the borrower the full amount of the mortgage loan, which will be repaid at the end of a spec-ified period in the same way as any other mortgage.
A building-loan agreement may provide, for example, that in the case of a $100,000 mortgage loan, $20,000 is to be advanced when the roof is on, an addi-tional $10,000 when the exterior trim is completed, another $20,000 when the rough plumbing and heating is in and the rough plaster com-pleted, another $10,000 is to be advanced when the white plaster is fin-ished, and the balance of the mortgage loan is to be advanced when the premises have been completely graded, landscaped, and all interior trim and fixtures have been installed and the building finished accord-ing to plans and specifications.