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Hypothecs (Mortgages,etc.)

luriiSokolov / iStock / Thinkstock George needed money to buy a car, so he asked his bank for a loan. The bank agreed to lend George the money, but only if George gave the bank a hypothec (mortgage) on his house to guarantee the loan. George already had a hypothec on his house, one he gave to another bank 10 years ago when he borrowed money to buy the home. George also saw an ad for a great deal on a used car and went ahead and bought it quickly. After he purchased the car, he was contacted by a loan agency. The agency told George that it had a hypothec on the car, and that 5 payments of $500 a month were still owed by the old owner.

Category: Hypothec

Difference Between Deed and Agreement

Difference between deed and agreement is very subtle that it is giving rise to the question why are some contracts labeled as agreements while others are called or referred to as deeds?  In fact, deed and agreement are two commonly encountered words in the context of contracts between individuals and parties. Whether you are buying property, entering into a partnership, becoming a franchisee of a company or buying stocks of a company, you sign documents to contain details of the contract between you and the other party. However, there are systems in every country to determine the legality of such documents as to whether they can be challenged in courts in the case of disputes between parties.

Category: Hypothec

Mortgage Agreement In Principle - HomeOwners Alliance

An ‘agreement in principle’ (AIP), ‘decision in principle’ or ‘mortgage in principle’ are all terms that refer to much the same thing.   A lender will take some basic information and perform a credit search and credit score before coming up with a figure that ‘in principle’ it would be able to lend. That can be useful for borrowers that are worried whether their credit history will be strong enough to meet the lender’s requirements and will also give them some comfort as to what they may be able to borrow.   An estate agent is bound to like the idea because they can see whether the prospective buyer will be able to secure a mortgage.

Category: Hypothec

Definition of a Mortgage Deed

A mortgage deed secures a home mortgage loan. A mortgage deed is a legal document that gives a mortgage lender a lien or security interest in a piece of mortgaged property. For example, if you take out a mortgage loan to purchase your house, you will sign a mortgage deed giving the lender a lien on your home. The function of a mortgage deed is to give the lender a way to foreclose on your mortgaged property in case you default in the repayment of the loan. So, if you fall more than 60 days behind on your mortgage payments, the lender may exercise its foreclosure right by selling your property to raise money to pay off the outstanding balance on the loan.

Category: Hypothec

Landlords Hypothec

In terms of the law, the Landlord enjoys a special protection assisting in the collection of arrear rental from tenants, which is called the "LANDLORD'S HYPOTHEC". Any action taken in the collection of arrear rental is based upon this protection. The hypothec allows the Landlord to sell the movable goods of the tenant (and in certain instances movables of a third party) which are on the leased premises, if the tenant fails to pay the rent. The hypothec exists from the date of the tenant's occupation of the leased premises, but becomes legally enforceable once a Court Order is obtained.

Category: Hypothec


Hypothecation is legal term that refers to the granting of a hypothec to a lender by a borrower. In practice, the borrower pledges an asset as collateral for a loan, while retaining ownership of the assets and enjoying the benefits therefrom. The term comes from civil law; although its usage varies from jurisdiction to jurisdiction, it is nearly synonymous to a lien or mortgage. Next Up BREAKING DOWN 'Hypothecation' A hypothec can be created contractually (usually by an official deed) or by law (such as a builder's hypothec). In both cases, the result is a lien on the property and restrictions on its sale for the owner until the principal obligation of the grantor of the hypothec, such as the repayment of a loan, has been met.

Category: Hypothec

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