Mortgagor vs Mortgagee [Who Is a Mortgagee?]

Mortgagor vs mortgagee is an important distinction that you need to know if you are applying for financing.

In this article, we’ll break down the difference between these two terms and answer a few related questions that we receive from our members.

This article is part of our free series on credit basics, ranging from how to get a credit card with an ITIN number to answering questions like what increases loan balance.

Feel free to use the table of contents to jump ahead to the sections most relevant to you.

Table of Contents

  1. Mortgagor vs Mortgagee
  2. What Are the Legal Obligations of a Mortgagor?
  3. Frequently Asked Questions
  4. Ready to Explore Your Options?

Mortgagor vs Mortgagee

The main difference between a mortgagor and a mortgagee is that the mortgagor is the borrower in a financing agreement while the mortgagee is the financier. In other words, in a traditional mortgage arrangement, the mortgagor is the individual purchasing the home while the mortgagee is the bank providing the loan to complete the purchase.

In certain instances, the mortgagee may also be an individual or company. This can be the case in a seller financing arrangement, where the financing to purchase the home is being supported by the previous owner of the home.

Alternatively, the mortgagee may be a mortgage company that specializes in home financing. In these cases, better interest rates can often be secured by the mortgagor.

That said, regardless of the source of the mortgage or the jurisdiction where the mortgage is being provided, the roles of mortgagor as the borrower and mortgagee as the financier are the same.

With this in mind, let’s take a look at the obligations of a mortgagor when it comes to securing and repaying a mortgage.

What Are the Legal Obligations of a Mortgagor?

The legal obligations of a mortgagor include fulfilling the specific payment terms under the mortgage agreement. This includes paying the agreed-upon amount over the agreed-upon period of time, paying any costs associated with maintaining the mortgage, and paying for the necessary insurance that may be required by the mortgagee to protect their interests.

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Frequently Asked Questions

Below are three of the most common questions that we receive from people looking into a mortgagor vs mortgagee. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.

Who Is Considered the Mortgagee?

The mortgagee is the financial institution providing financing in a loan agreement. For example, in a traditional mortgage, the mortgagee is the bank that is providing the capital to purchase a home. The other party to the financing arrangement is the mortgagor, which is the individual purchasing the home with bank financing.

Can Mortgagor and Mortgagee Be the Same Person?

In certain circumstances, the mortgagor and mortgagee can be the same person. However, this would typically require a person to either be borrowing against their own assets that are held with a financial institution (e.g. Lombard loan) or through complex structures that would enable them to receive a mortgage through an entity that they control and self-financed.

Who Is Grantor or Mortgagor?

Grantor or mortgagor refers to the borrower, which is the individual securing financing in order to purchase an asset. In certain states and countries, they use different terminology. However, the specific obligations and rights of the mortgagor are consistent across most jurisdictions.

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GlobalBanks Team
GlobalBanks Team

The GlobalBanks editorial team comprises a group of subject-matter experts from across the banking world, including former bankers, analysts, investors, and entrepreneurs. All have in-depth knowledge and experience in various aspects of international banking. In particular, they have expertise in banking for foreigners, non-residents, and both foreign and offshore companies.

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