Mortgage

A mortgage is the transfer of an interest in immovable property to secure the repayment of a loan. The borrower (mortgagor) remains the owner, but the lender (mortgagee) can enforce its security against the property if the loan is not repaid.

Kinds of mortgage

Section 58 of the Transfer of Property Act, 1882 lists the kinds, including simple mortgage, mortgage by conditional sale, usufructuary mortgage, English mortgage and mortgage by deposit of title deeds. Most home loans are secured by deposit of title deeds, often called an equitable mortgage, where the borrower hands the original title documents to the bank in a notified town.

Writing and registration

Under Section 59, a mortgage securing Rs 100 or more, other than a mortgage by deposit of title deeds, must be by a registered document signed by the mortgagor and attested by at least two witnesses. Stamp duty applies under the State stamp law. Banks also register their security with the central registry under the SARFAESI Act, 2002.

When the loan is repaid

RBI rules require lenders to return original property documents within 30 days of full repayment and to remove any charge registered with registries, with compensation for delays caused by the lender. Ask for a no dues certificate and the return of all originals.

Draft a mortgage deed or a bank loan NOC request, and read home loan NOC and original property documents.