Uncle or aunt helping their favorite family member.Here is a chart of some of the preventable suffering this document could prevent: The lender must go through a lengthy court process and stand in line with other creditors. Without a secured loan, a lender has few options if the borrower goes bankrupt, gets sued unexpectedly, dies, or decides to stop making payments. You should have a valid and enforceable loan document to avoid having an intra-family loan deemed a gift (and be subject to gift taxes). It can also prevent misunderstandings with the IRS.Īs you can imagine, the IRS tries to crack down on gifts disguised as a loan between family members. Chattel Mortgage (for personal property)Ī written agreement detailing the loan between you and a family member can prevent misunderstandings and a family fight if something goes wrong.Property: a legal description of the property pledgedĪs a reference, a mortgage deed is also called:.Principal Amount: the sum of money borrowed.Lender: who is lending the money and receiving a lien on the property.Borrower: who is borrowing the money and pledging the property.The borrower may also be called the mortgagor or trustor.Ī simple mortgage agreement will identify the following essential elements: The lender may also be called the mortgagee or trustee. The mortgage deed is separate from the loan agreement or promissory note that creates the actual loan, and it sets out the terms and conditions of the loan. In a mortgage deed, a borrower grants a lender conditional ownership of specific property or assets as a security interest against a loan until the borrower repays the loan in full.

Should the borrower fail to adhere to the mortgage agreement terms, the bank can take possession of the property through foreclosure. Under a mortgage deed, the lender maintains real estate property ownership until the borrower repays the loan in full. This security interest, called a mortgage, allows the lender to recover the property if the borrower fails to pay.Ī mortgage deed is a legal document between the borrower and lender that creates a lien on the property. When a borrower takes out a loan to purchase a real estate property, they agree to pay the lender back for the loan.ĭuring the repayment period, the lender, usually a bank or financial institution, maintains an interest in the real estate property. Be sure you check these forms to ensure you use the correct document. A Quitclaim Deed and Warranty Deed are other types of real estate deeds that are less common but sometimes used to meet real estate goals.

Template for contract for deed illinois