{"id":51,"date":"2021-12-14T16:28:00","date_gmt":"2021-12-14T16:28:00","guid":{"rendered":""},"modified":"2022-01-18T02:20:23","modified_gmt":"2022-01-18T02:20:23","slug":"what-is-a-mortgage-really","status":"publish","type":"post","link":"http:\/\/mn.arenter.com\/coach2\/2021\/12\/14\/what-is-a-mortgage-really\/","title":{"rendered":"What is a mortgage, really?"},"content":{"rendered":"

Does a mortgage always mean a loan?\u00a0 Is it always associated with debt<\/u><\/h4>\n

\"\"<\/p>\n

The answer is NO!<\/span><\/b><\/h5>\n

A mortgage is just a security instrument.\u00a0 What is a security instrument<\/i><\/u>?\u00a0 It’s a contract (an agreement) that references another agreement, oftentimes this “other'” agreement is a promissory note, a loan; however, it doesn’t always have to be debt.\u00a0 Let’s explore why you might use a mortgage as a tool for your real estate investment business.\u00a0<\/span><\/p>\n

OK, let’s back up a second.\u00a0 A mo<\/span><\/p>\n

rtgage, is just one type of security instrument.\u00a0 Some states are deed-of-trust states and some states are mortgage states.\u00a0 Let’s use the generic term of security instrument, so we can talk in broader terms.\u00a0 \u00a0What’s the point of a security instrument?\u00a0 \u00a0The security instrument is a recordable (on public record) agreement which stipulates what the parties agree can happen if the terms of the other referenced agreement is violated .\u00a0 For example, if the promissory note (the other referenced agreement within this security agreement), goes into default, then the mortgage holder can foreclose (for example).<\/span><\/p>\n

The security agreement (mortgage or deed of trust) will spell out the recourse and rights of either party.\u00a0 Usually foreclosure is the remedy; however, there can be other remedies which can get creative and extend beyond the property in question.\u00a0 For example, an option could be executed secured with a mortgage, and if the option is violated (for example maybe the taxes were not paid by the occupant or some other provision of the option is not upheld), then the option holder could enforce\u00a0the the terms of the mortgage, which may include\u00a0access or rights to another property, or some other “specific performance” (often called a performance mortgage).<\/span><\/p>\n

Keep in mind, the person who is signing the security instrument is the fee-simple owner of the property.\u00a0 \u00a0As the owner, you are agreeing (granting) the mortgage holder permission to do all these things.\u00a0 It’s a powerful tool, and one that can be used to secure a lease, an option, a loan, or some other agreement (i.e., property management\u00a0agreement, purchase agreement, occupancy agreement, lease-back, etc).<\/span><\/p>\n

Can you think of how you might use this to secure your agreement, beyond a promissory note?\u00a0 \u00a0Leave a comment with your ideas.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Does a mortgage always mean a loan?\u00a0 Is it always associated with debt The answer is NO! A mortgage is just a security instrument.\u00a0 What is a security instrument?\u00a0 It’s a contract (an agreement) that references another agreement, oftentimes this “other’” agreement is a promissory note, a loan; however, it doesn’t always have to be […]<\/p>\n","protected":false},"author":1,"featured_media":222,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"pagelayer_contact_templates":[],"_pagelayer_content":"","footnotes":""},"categories":[21,20,18,22,23,19,24],"tags":[],"class_list":["post-51","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","category-housing-boom","category-investor-tips","category-opm","category-real-estate-investing","category-sub2","category-subject2"],"_links":{"self":[{"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/posts\/51","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/comments?post=51"}],"version-history":[{"count":7,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/posts\/51\/revisions"}],"predecessor-version":[{"id":228,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/posts\/51\/revisions\/228"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/media\/222"}],"wp:attachment":[{"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/media?parent=51"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/categories?post=51"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/tags?post=51"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}