mortgage

Conveyance of the conditional right of ownership (lien) on an asset or property by its owner (the mortgagor) to a lender (the mortgagee) as security for a loan. The lien (also called lender's security interest) is recorded in the register of title documents to make it public information, and is voided when the loan is repaid in full. Virtually any legally owned property can be mortgaged, although real property (land and buildings) are the most common. When personal property (appliances, cars, jewelry, etc.) is mortgaged, it is called chattel mortgage. In case of equipment, real property, and vehicles, the right of possession and use of the mortgaged item normally remains with the mortgagor but (unless specifically prohibited in the mortgage agreement) the mortgagee has the right to take its possession (by following the prescribed procedure) at any time to protect his or her security interest. In practice, however, the courts generally do not automatically enforce this right when it involves a dwelling house, and restrict it to a few specific situations. In the event of a default, the mortgagee can appoint a receiver to manage the property (if it is a business property) or obtain a foreclosure order from a court to take possession and sell it. To be legally enforceable, the mortgage must be for a definite period, and the mortgagor must have the right of redemption on payment of the debt on or before the end of that period. Mortgages are the most common type of debt instruments for several reasons such as lower rate of interest (because the loan is secured), straight forward and standard procedures, and a reasonably long repayment period. The document (debt instrument) by which this arrangement is effected is called a mortgage bill of sale, or just a mortgage.

Always live within your means: If you make it a habit to live within your means each and every day, you are less likely to go into consumer debt when gas or food prices go up and more likely to adjust your spending in other areas to compensate. Debt begets more debt when you can't pay it off right away - if you think gas prices are high, wait until you're paying 29.99% annual percentage rate (APR) on them. To take this principle to the next level, if you have a spouse and are a two-income family, see how close you can get to living off of only one spouse's income. In good times, this tactic will allow you to save incredible amounts of money - how quickly could you pay off your mortgage or how much earlier could you retire if you had an extra $40,000 a year to save? In bad times, if one spouse gets laid off, you'll be OK because you'll already be used to living on one income. Your savings habits will stop temporarily, but your day-to-day spending can continue as normal.

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