A mortgage is nothing but the transfer of interest in property to the lender till the mortgage terms are fulfilled completely. This means that the borrower needs to pledge the property as collateral till the full amount of money is paid back. There are basically two types of mortgages; mortgage by demise and mortgage by legal charge.

• In a mortgage by demise the lender or the mortgagee becomes the owner of the property till the time the complete amount of loan is repaid or all the legal obligations fulfilled. On the other hand in a mortgage by legal charge the borrower has the full ownership of the property but the creditor has the legal right to foreclose or sell the property in case of a default or non payment on the part of the borrower.
• Initially mortgage by demise were the only form of mortgage that was available in the market. However as the world undergoes economic and technical advancement this type of mortgage is slowly becoming more uncommon. However, mortgage by demise is still a popular financial product in many countries and to some extent in the United States as well.
• Numerous other common law jurisdictions have either eliminated or minimized the use of the mortgage by demise. For instance, in the United Kingdom and Wales this sort of mortgage no longer exists, because of the Land Registration Act 2002. These types of mortgages are usually not available easily in the market and can be chosen if the property owner is confident that there will not be a default on mortgage payment.

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