As an example, Mr. Wang applies for a loan of 300,000 yuan from a bank and agrees to repay the loan after 10 years. The bank wants to lend him the money, but is worried that Mr. Wang does not pay back, so it requires Mr. Wang to mortgage his house as security, in case Mr. Wang does not have the ability to repay the money in the future, the bank has the right to auction the house to pay back the money. However, Mr. Wang can move in normally during the mortgage period, and it will not have any impact on his daily life.
Bank: Creditor/Mortgagee
Mr. Wang: Debtor/Mortgagor/House Owner
Features of a mortgage on a mortgaged house:
The mortgagee does not need to be in actual possession of and control of the mortgaged house, and only needs to register the mortgage, that is to say, the seller who sells the house even though he is actually residing in the house, the house may have been mortgaged to a third party.
The two parties can freely agree on the duration of the mortgage, the specific amount of the claim to be guaranteed, the mortgagee to realize the mortgage time, conditions, ways, etc. In short, for the mortgage of the house, the two parties have enough free space to agree.
The mortgagor still enjoys full rights to the mortgaged house, such as: possession and use of the house, the house will be rented out for profit.
The debtor can use his own house as collateral, or use another person's house as collateral, and the same house can be mortgaged several times.
After the house is mortgaged, if the owner of the house wants to transfer or grant the house to others, he needs to obtain the consent of the mortgagee, otherwise the disposition is invalid, unless the transferee of the house is willing to repay the debt instead of the mortgagor, and for the transferee's behavior of repaying the debt on behalf of the mortgagee, the mortgagor of the house shall not refuse without justifiable reasons; on the other hand, if the mortgagor of the house wants to grant the mortgage to others, the mortgagor of the house shall not reject the mortgage. On the contrary, if the mortgagee wants to give his mortgage to others, he only needs to notify the mortgagor and does not need to obtain his consent.