Having bought my own home, I have realised that only a few people actually fulfil their ambition of home ownership. But now since there are many financial institutions that offer to finance, buying a house is no longer a monumental task. The lender retains a charge on your property title whenever you apply for a mortgage. However, you have the option of either an equitable or registered mortgage. But if you are new to the loan and mortgage world and you are not really aware of the
difference between equitable mortgage and registered mortgage, I will help you out
.
Get quick and easy home loans through NoBroker at minimal interest rates.What is Equitable mortgage vs registered mortgage?
The term equitable derives from the word equity. Equity refers to acting in the interests of justice in financial terms. Equitable mortgages, also known as implied or constructive mortgages, are a type of financing arrangement in which the mortgagee (financial institution) and the mortgagor (borrower) mutually agree on the terms and circumstances of the mortgage loan.
What is a Registered Mortgage?
In a registered mortgage, also known as a deed of trust, the borrower willingly transfers ownership of the property to the lender in the event that the debt is not repaid.
Difference between equitable and registered mortgage
| Parameters | Equitable Mortgage | Registered Mortgage |
Registration |
There is no registration required for an equitable mortgage. |
The registered mortgage stipulates that registration is required. |
Process |
Under the equitable mortgage, purchasing a stamp paper is required. |
You, as the borrower, must get in touch with the sub-office registrar to start the registered mortgage procedure. |
Cost Involved |
The cost of stamp duty under this mortgage is either 0.1% or 0.2% of the value of your home. |
To get a registered mortgage, you must spend 5% of the value of your house. |
Affordability |
An equitable mortgage is less expensive than a registered mortgage. |
Registered mortgages are slightly more expensive. |
Lender's Rights |
In the event of a default, the lending institution seizes the property secured by your mortgage and sells it at auction to make up for its loss. |
In the event of default, ownership of the property secured by your mortgage is transferred to the financial institution, who is free to use or sell it as they see fit. |
Risk |
An equitable mortgage carries a larger risk than a registered mortgage. |
A registered mortgage is regarded as risk-free since it offers security to both borrowers and lenders. |
I hope my answer outlines the
difference between equitable mortgage and registered mortgage for you clearly.
Read More: What is Equitable Mortgage? What is Registered Mortgage? Meaning and Concept. Why Registered mortgage is also known as a Deed of trust?Your Feedback Matters! How was this Answer?
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Difference Between Equitable Mortgage and Registered Mortgage?
Hansika
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2022-11-14T11:28:16+00:00 2022-11-14T11:28:17+00:00Comment
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