Mortgage / Mortgage loan

If the collateral for the loan is real estate, the creditor registers a mortgage on the real estate.

The mortgage in favor of the creditor is based on the credit agreement between the creditor and the borrower. The mortgage is registered on the property's title page. The registration of the mortgage right is a condition for the disbursement of a loan or loan secured by real estate.

It is important that the amount of the registered mortgage does not change during the term. So, in some cases, even though the borrower 's debt is reduced in the process, the amount of the mortgage registered on the property remains unchanged. Of course, this does not mean that the bank would demand the registered amount from the debtor. The bank can only ask for the current amount.

In addition to the mortgage right, the creditor can also request the registration of a prohibition against alienation and encumbrance as a guarantee for the loan. If the alienation prohibition is registered, the property cannot be freely sold. Registration of the encumbrance ban prevents further encumbrances on the property. It is not possible, for example, to include the property as a guarantee as security for another loan.

With the registration of the mortgage right, the ownership of the property does not transfer to the creditor. The property remains in the possession of the original owner, who can use and utilize it.

However, if the borrower does not or does not fulfill his payment obligations arising from the loan agreement, the creditor has the option to initiate the sale of the property based on mortgage law. In the event of a sale, the received purchase price can be used to pay off the borrower 's current debt. Of course, in doing so, the creditor must comply with the rules for the enforcement of the mortgage right. 

After full repayment of the loan, the registered mortgage must be cancelled. Deletion is not automatic. The cancellation permit is issued by the creditor (the bank) at the request of the borrower. This must be submitted to the competent office.