Mortgagee

What Does Mortgagee Mean?

A mortgagee is a lender who provides the funds for a mortgage, which the borrower uses to purchase property, such as a residential home.

The mortgage borrower is responsible not only for repaying the loan but also for paying the interest on it. Failure to make timely payments gives the mortgagee the authority to seize the property from the borrower.

The mortgagee is typically a bank or a similar financial institution.

Insuranceopedia Explains Mortgagee

The mortgaging bank or financial institution typically conducts a credit investigation to assess the borrower’s ability to repay the loan and make interest payments. This evaluation helps the mortgagee determine the size of the mortgage they can offer the borrower, as well as the terms of the loan, such as the monthly interest rate.

Payment structures can vary. The mortgagee may accept monthly interest payments, with the full loan amount due at the final payment, or they may divide the loan amount into installments, adding monthly interest. The latter option is often less burdensome for many borrowers. Regardless of the payment structure, the borrower must repay the entire mortgage on time, or the mortgagee reserves the right to repossess the property purchased with the mortgage.