They say that the mortgage deed is about recording the mortgage right. What exactly is that, the mortgage right?
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Mortgage law is also called the right of the mortgage. It is a right that you grant to the bank when you take out a mortgage loan. That’s why we call you the mortgage lender, and the bank the mortgagee. You give the right of mortgage, the bank gets the right.
The right of mortgage means that the bank has the right to claim and sell your property if you do not meet your obligations. Do you not meet the monthly costs as agreed? In that case, the bank can claim your home through the right of the mortgage without needing to go to court.
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Recording the mortgage right. The finalization of a mortgage is done with the signing of the mortgage deed at the notary. An official document with a lot of legal languages, in which the agreements you made with the bank about your mortgage are recorded. What does that mean? On this page, we discuss several important matters about the mortgage deed.
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A mortgage deed is a contract between you and the bank. For both parties, the rights and duties are officially recorded by the civil-law notary, so that no misunderstandings can be found later on.
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What the mortgage deed is all about is the right of the mortgage. The bank will receive the mortgage right from you. This means that the bank is the mortgagee in legal terms, while you are the mortgage lender. The word mortgage in these terms is not about the borrowed amount of money, but the right of the mortgage.
This mortgage right means that the bank has the right to claim and sell your property if you do not meet your obligations. So: if you do not pay the monthly costs as agreed.
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What is stated in a mortgage deed? The content of the mortgage deed is not the same for every bank. That determines the bank: with one it is a very detailed and long story, with the other much shorter. The following information is in any case included in the mortgage deed:
- The parties involved: mortgage lender (you), mortgagee (the bank) and the notary.
- The amount of mortgage registration.
- The collateral on which the mortgage right is issued.
- Information about the agreed mortgage interest.
- Other important matters are sometimes in the house mortgage loan deed, the other time in the general terms and conditions. The obligation to ensure the collateral, for example.
The mortgage registration is the amount for which the bank receives the mortgage right from you. In the case of a forced sale, this is the amount that the bank can claim immediately. This amount may be higher than the amount that you borrow from the bank at this time. There are two reasons for this:
- Because an amount is added to the borrowed amount for overdue interest.
- Because you choose to register the mortgage higher.
- By registering your mortgage now higher you can borrow an additional amount later (for example for a renovation) without having to go to the notary. That saves you the costs of a new mortgage deed!
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A mortgage deed costs money. The costs can vary considerably per notary office. Each notary decides for himself what he wants for a mortgage deed. There are several websites where you can compare notarial rates.
Pay attention to whether the price mentioned is all-in. Are additional costs such as investigation costs and the costs of registering with the Land Registry included in it? And the VAT? If that is not the case, a notary who looks cheap can still prove to be an expensive choice.
Signs of the mortgage deed
The mortgage deed must be signed by all parties. You go to the notary’s office for that. Maybe you expect to meet a bank representative. That is usually not the case. An employee of the civil-law notary then signs as a proxy on behalf of the bank.
Registration with the Land Registry
If the mortgage deed has been signed by all parties, the civil-law notary will register with the Land Registry. This means that the mortgage is mentioned in the public registers. Only after that registration is the mortgage completely official. The notary then sends you a copy of the registered mortgage deed.