Which of the Following Is a Mortgagor's Responsibility? Explained

It is a big step to buy a property with a loan and comes with a certain set of responsibilities. If you have ever asked: “Which of the following is a mortgagor’s responsibility? you're at the right place.

This article explains what homeowners must do when they have a mortgage in clear words, making everything simple to understand.

What Is a Mortgagor?

A mortgagor is an individual or group that borrows money from a lender (usually a bank) to purchase a property, such as a home or other real estate. These are the borrowers of the mortgage. Hence, their credit score and collateral determine the terms for mortgage financing. A mortgage loan requires the mortgage lender to pledge title to the real property as collateral for the loan.

This differs from a mortgagee, a company that lends money to a borrower in order to acquire real estate.

What Does a Mortgagor Have to Do?

Here are the main things you’re responsible for when you take out a home loan:

1. Pay Your Mortgage Each Month
   This is the most important job. You must pay your mortgage on time every month. Your payment usually includes:

• The amount you borrowed (loan)
• Interest (the cost of borrowing money)
• Property taxes and home insurance (if part of your payment)

Missing payments can result in late charges, harm to your credit rating, and potentially losing your home.

2. Take Care of the Home
   You need to keep the home in good shape. That means:

• Fixing things when they break
• Keeping it safe and clean
• Preventing major damage like mould, roof leaks, or broken heating systems

The home is your investment, and the lender wants to make sure it stays valuable.

3. Pay Property Taxes and Insurance
   Even if your mortgage company handles these through your monthly payment, it’s still your job to make sure:

• Your property taxes are paid on time
• Your home is always insured
• Extra insurance (like flood insurance) is active if needed

If these aren’t paid, you could get into trouble with both the government and your lender.

4. Follow the Loan Rules
   When you signed your loan papers, you agreed to certain rules. These usually include:

• Living in the home, if that’s what you promised
• Getting approval before big changes, like adding a second unit
• Not using the home for illegal or risky activities

If you break these rules, your loan could be cancelled, and you might have to pay it back immediately.

Responsibilities of a Mortgagor

• Pay Back the Loan: The person who took out the mortgage (the mortgagor) must pay back the money they borrowed, along with interest.
• Make Monthly Payments on Time: The borrower must pay the agreed amount monthly. Missing payments can lead to extra fees or even losing the home.
• Property Taxes must be Paid: the borrower must be current on all taxes on the property. If they do not, they could be fined or risk foreclosure.
• Maintain the Home: The borrower must maintain the home through adequate cleaning, repairs and maintenance.
• Homeowner’s Insurance: The borrower will generally be required to obtain insurance on the home. This protects both them and the lender if an unfortunate event occurs, such as a fire or storm damage.

Types of Mortgage Holders

• Individual Homebuyers: These are individuals who get a loan from a lender (a mortgagee) to buy a home or apartment for personal use.
• Real estate investors: When they borrow money to purchase a house for investment reasons, like condos or homes for resale, they can also be categorised as mortgagors.
• Business Entities: When corporations, partnerships, and other business entities borrow money to purchase industrial real estate for operational or investment purposes, they may also be mortgagors.
• Developers: To fund the building of residential, commercial, or mixed-use properties, real estate developers frequently get mortgages.
• Government Entities: When authorities, organisations, or entities borrow money to construct low-cost housing or public infrastructure initiatives, they can also be mortgagors.

Steps to Apply for a Mortgage Loan (Simplified)

Check Your Finances
Look at how much money you earn, what you’ve saved, any debts you have, and your credit score. This helps you figure out how much you can afford to borrow.

Compare Loan Types
There are different kinds of home loans. Some are backed by the government (like FHA or VA loans), while others come from regular banks. Pick the one that fits your situation best.

Pick a Lender
Shop around and compare banks or lenders. Look at their interest rates, fees, and reviews before choosing one.

Get Pre-Approved
This means a lender checks your financial information and gives you an estimate of how much you can borrow. It shows sellers you’re serious.

Apply for the Loan
Once you find a house you like, you’ll fill out a loan application with details about your income, job, and the home you want to buy.

Loan Review
The lender checks your information and makes sure the home is worth the price. This helps them decide if they’ll give you the loan.

Loan Approval
If all goes well, you’ll get a letter saying your loan is approved and what the terms are. Make sure you understand it before signing.

Closing
This is the final step where you sign the papers, pay any final costs, and get the keys to your new home.

Start Making Payments
Begin paying your mortgage every month on time, as agreed.

If you’ve ever wondered, “Which of the following is a mortgagor’s responsibility?” — Now you know. A mortgagor must pay, be punctual in payment of loans, keep the house in good condition, pay property taxes and insurance, and abide by the provisions of the loan agreement. These steps help protect your home and keep your loan in good standing. Being a responsible mortgagor means taking care of your home and your money, both now and in the future.