As you walk through the mortgage process, you will come across many words that you are unfamiliar with. One of these words is mortgagee. While it may initially look like the extra letter tacked on the end of the word is a typo, a mortgagee is actually one of the parties involved in the mortgage transaction. More specifically, a mortgagee is the party that holds the mortgage. In your case, this may be the lender or bank. If your loan is sold to a servicing company after closing, the loan servicer will be the mortgagee.

A mortgagor is another term that often appears on the same legal documents as a mortgagee. A mortgagor is the borrower in the mortgage transaction. The mortgagee may also be defined as the borrower or home loan applicant. As you continue reading over your loan documents, you may also come across another term that you are unfamiliar with, and this is real property. Real property is the subject property that is being used as collateral for the mortgage transaction. The mortgagee clause is a special provision in the loan documents that serves to protect the lender or mortgagee in the event of property damage. Specifically, it tells the insurance company who the lender is in the event a claim is filed. This is important because the lender is often the entity that is most exposed to financial losses in the event the property is damaged.

Are you still confused by these or other lending terms? At MortgageDepot, we want you to feel confident about all aspects of the lending process. Our team is always happy to explain terms so that you can proceed with full confidence. If you plan to apply for a home loan soon or if you are in the middle of a transaction, feel free to connect with the MortgageDepot lending team for clarification on any terms and concepts.

Contact one of our loan consultants to learn more.

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