Mortgage Loan Agreement Template
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Mortgage Loan Agreement: What Is it?
A Mortgage Loan Agreement is a formal document that describes the arrangement between the lender and the borrower - upon signing, this legal instrument gives the latter access to the lender's money creating a lien on the real estate.
Once this contract is formalized, the person borrowing money makes a promise to repay the amount indicated in writing they need to use to buy a house or apartment for themselves and their family. In case the borrower fails to make regular mortgage payments or violates other terms of the agreement, the lender will have the right to take possession of the property in question recovering their money via foreclosure.
You can find a Mortgage Loan Agreement template below.
Mortgage Loan Agreement: How to Make?
Here is how you should compose a Mortgage Loan Agreement Form:
- Identify the lender and the borrower by their full names and contact details.
- If the legal address of the real estate the borrower will pay for using the loan is known, add it to the text of the document.
- List the payment terms - the amount of money lent to cover the mortgage, the interest rate, and the payment schedule. Additionally, the parties need to agree on the payment method convenient for both of them and mention the possibility of prepayment in the event the borrower wants to pay the mortgage loan off early.
- Confirm the real estate serves as collateral safeguarding the financial interests of the lender - describe how many weeks or months of non-payment the lender will have to deal with before seizing and selling the residential property to mitigate their financial losses.
- Although the lender is entitled to start the foreclosure several months after the first missed payment, consider recording other penalties like late fees before depriving the borrower of their home - mention the proper process of notifying the borrower about the agreement violation as well.
- Sign and date the papers. As a rule, a Mortgage Loan Agreement does not need to be notarized but if you believe a legal dispute may occur in the future or the loan amount is large enough to make you worry, book an appointment with a local notary public who will verify the identities of the parties and certify their intention to create a lien on the property securing mortgage loan repayment.
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