Imagine, first day at work and you confuse your boss with the receptionist… In life it is important to know who is who and with your mortgage, too. Among the figures of a mortgage loan there is one very important for you, that of the mortgagor. Do you know who it is? Let's see!
Who is the mortgagor?
A mortgagor is the person who incurs a debt. From there, the most formal definition of mortgagor is the person who has the obligation to fulfill the duty established in the mortgage. In other words, the person who appears on the loan as the debtor and has the obligation to pay the mortgage, also known as the mortgagor.
In a mortgage loan, the mortgagor has the obligation to pay, not to repay. This obligation ultimately falls on the property, which acts as collateral for the loan. This does not mean that you can stop paying the mortgage, since in that case the mortgage guarantee will be executed and you would be left without the property.
Who can be a mortgage debtor
Anyone can be a mortgage debtor. To become one, you only need to take out a mortgage in your name and be responsible for repaying the loan.
This includes people with Spanish nationality as well as those from any other country. That is why there are mortgages for non-residents .
In any case, just because you can apply for a mortgage doesn't mean you should do it lightly. Now you'll understand why.
Duties and rights of the mortgage debtor
As a mortgage borrower, you will have a number of responsibilities, starting with paying the loan and doing so under the conditions stipulated in the contract you have signed. That is why it is so important to be clear about the elements that make up a mortgage and the usual clauses.
You will also have a series of rights that are included in the Mortgage Law and different decrees such as Royal Decree Law 1/2017 that have been improving consumer protection in terms of floor clauses and other abusive clauses.
In this sense, the law especially protects the most vulnerable people. In addition, there are mechanisms such as the Code of Good Practices, whose adherence is voluntary, and which includes entities such as UCI (Unión de Créditos Inmobiliarios).
This code includes solutions such as debt restructuring, payment in kind or affordable rents for mortgage borrowers in vulnerable situations.
The figure of the non-debtor mortgagor, responsibility towards the creditor
There is another additional figure in the mortgage that you should know about. This is the mortgagor or non-debtor mortgagor.
The figure of the non-debtor mortgagor occurs when in a loan there is a person who puts up his mortgage as collateral for the debt, but is not a debtor under the mortgage.
For example, they would be parents who provide their house as collateral for their child's mortgage, but they are not debtors.
And isn't that the same as a guarantor or a surety? The truth is that they are different figures with different responsibilities. Unlike the guarantor, the non-debtor mortgagor does not put all of his assets at stake as collateral.
In the event of non-payment by the mortgagor, the non-debtor will only be liable with the assets listed on the other side. To make it easier to understand, the financial institution may demand payment with the property or asset that has been put up as collateral, but with nothing else.
On the other hand, the guarantor does provide a personal guarantee and will be liable for the debt with all of his or her assets.
The figure of the non-debtor mortgagor is common in mortgages with double guarantee, where the second home is used as additional guarantee to, for example, obtain more money for a loan. In addition, in most cases this guarantee on the second home will not be for 100% of it, but for a percentage.
Knowing your role as a mortgagor when signing the loan will help you make better decisions regarding the mortgage you are going to apply for.