First and second Mortgage LoansThe first and second mortgage loans
There are no longer any such benefits and the depositing of documents is used less frequently, especially since the collateral of the creditor can be doubtful. Mortgages usually provide for loans and interest payments to be made in one or more ways: amortised - this is the most commonly used way of repaying the loans and interest in regular payments over a certain amount of time.
Frequently, such mortgage loans require the repayment of the debt on time, blurring the difference between amortised and demand-driven mortgage loans; only interest - this is less widespread in Bermuda and usually only applies to developer loans. This is a deferred mortgage with deferred interest. A mortgage certificate usually asks the lessee to promise: to pay back the mortgage with interest; not to rent or resell the house without the lender's consent; to keep the house covered so that, if it is broken, it can be fixed and sold.
Lenders can obtain a judicial order requiring the debtor to vacate the house and sell it. Through a mortgage certificate, a creditor becomes a secure creditor. That means that the sales revenue of an bankrupt house of a debtor must first repay the secure lender's credit; all remaining revenue (if any) is then available to the insecure lenders.
The first mortgage of a house transmits the inheritance to the secure creditor. Borrowers have the right to take possession of the house and have the house returned if the mortgage credit is paid back with interest. The second and following mortgage convey a house that is defeated by the first mortgage.
And the first creditor will already keep the inheritance in a borrower's house. Thus, second and succeeding collateralised creditors are only eligible for the right to reimbursement. Second- and successive mortgage loans are less attractive to creditors because, if a debtor is in arrears, (i) the first secure creditor must (and can only reluctantly) resell the house, and (ii) only sales revenue remaining after the first mortgage is repaid is available to second and secure successive creditors.
Mortgage should be secured by entry in the register. Creditors with non-registered mortgage loans may have difficulty in enforcing them. Mortgage loans are mostly paid back conscientiously and creditors seldom go to the courts. Once a mortgage has been paid back, the debtor should ask a lawyer to draw up a certificate of reassignment that will transfer the house inheritance to the debtor, who then becomes the owner of the house.
If a house is encumbered by a mortgage, the collateralised creditor should keep the documents safe. As soon as a mortgage is paid back, the owner of the house usually assumes responsibility for handing over the documents. House owners should leave documents with a lawyer or local banks and not keep them at home. A house is less saleable without tidy and comprehensive documents and will not be able to obtain a mortgage without difficulty.