Bank Mortgage

Bank Mortgage

Bank Mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by the way of loan, an existing or future debt or the performance or an engagement which may give rise to a pecuniary liability. The transferor is called a mortgagor, the transferee a mortgagee, the principal money and interest of which payment is secured for the time being are called mortgage money, and the instrument (if any) by which the transfer is effected is called a mortgage deed.
Where the property is a house, the easements annexed thereto, the rent thereof accruing after the transfer, and the locks, keys, bars, doors, windows, and all other things provided for permanent use therewith.
Where the property is a debt or other actionable claim, the securities therefore (except where they are also for other debts or claims not transferred to the transferee), but not arrears of interest accrued before the transfer Where the property is money or other property yielding income, the interest or income thereof accruing after the transfer takes effect.

Mortgage Types

1. Simple mortgage-Without delivering possession.
2. Mortgage by conditional sale- On default of payment of the mortgage-money on a certain date the sale shall become absolute.
3. Usufructuary mortgage: Delivers possession and authorizes mortgagee to receive the rents and profits accruing from the property as a part of payment.
4. English mortgage: Transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that he will re-transfer it to the mortgagor upon payment of the mortgage-money as agreed
5. Mortgage by Deposit of title deed: Where a delivers to a creditor or his agent documents of title to immoveable property, with intent to create a security thereon.
6. Anomalous mortgage: Other than the above forms.

All mortgages must be registered mortgage.

Special Types of Mortgages

Second Mortgage: Once a free holder has already mortgaged his property and wishes later to borrow more on the same property, he can do so by a second mortgage if, of course, there is enough margin in the value of property.
Sub Mortgage: If a lender himself wishes to borrow money on the security of a mortgagor’s promise to repay him, he can produce to his banker the mortgage deed. If the banker is satisfied the advance may be made on the security of the mortgage deed
Token Mortgage: Token mortgage is a registered mortgage where only a token amount is registered by a deed securing covering the token amount of loan and the rest loan amount is covered by submitting simply an agreement to create further charge.

Documents for Mortgage over Property

1. Original purchase deed and along with Bia deed(s)
2. SRO Certified copy purchase deed plus endorsed Deed delivery receipt(interim period)
3. Non-encumbrance Certificate with search fee paid receipt
4. 4.Certified Mutation Khatian including mutation fee paid receipt (DCR) S.A,C.S,R.S. Khatian(s)
5. Up to date rent paid/municipal tax paid receipt(s) etc.
6. Valuation Certificate
7. Lawyers confirmation
8. Guarantee of third party mortgagors
9. Board Resolution if the property is in the name of Limited Company
10. Memorandum of Association to check Mortgage authority of company’s property
11. Insurance Covering Construction value.
12. Certified Math Khatian
13. Location Map (if there is no holding number or outside main city).

Mortgage under the Transfer of Properties Act and Registration Act

As per section 58 of The Transfer of Property Act, 1882, mortgage is transfer of interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt or the performance of an engagement which may give rise to financial liability. The transfer of property Act, 1882 (Act No. IV of 1882, dated February 17, 1882) came into force on the First day of July, 1882.

The Transfer of Property (Amendment) Act, 2004 came into force on the first day of July, 2005. There are 137 sections under 8 chapters. As per Section 6 of this Act property of any kind may be transferred, except as otherwise provided by this Act or by any other law for the time being in force. According to section 4 of the Transfer of Property Act, 1882, other Acts are related to this Act like the Contract Act, 1872, the Stamp Act 1899, and the Registration Act, 1908. Particularly Registration Act is a part and parcel of Transfer of property Act. The Registration Act, 1908 (Act No. xvi of 1908) and subsequently the registration (Amendment) Act, 2004 came in to force on
the first day of July, 2005.

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