Independent Mortgage Advice

When considering any independent mortgage advice, it is essential to understand the mechanism of Usufructuary Mortgage. Under this mortgage, the mortgagor gives possession of the property or binds himself, either expressly or by implication, to give such possession to the mortgagee. The mortgagee is authorized to retain his possession over the property until the payment of the mortgage money is made and to receive rents and profits accruing from the property and to appropriate the same in lieu of interest or in payment of the mortgage money or in both.

The chief characteristics of government Help to Buy scheme usufructuary mortgage is the transfer of the possession over the mortgaged property to the mortgagee, who is entitled to receive income accruing these from and to appropriate the same towards the payment of the mortgage money and/or interest thereon. The liability of the mortgagor is thus gradually reduced.

It is worth mentioning in this regard that it is not necessary that a deed of mortgage must always refer to a particular rate of interest. It is certainly open to the parties to agree that the income from the property accruing over a certain period will be sufficient to cover the principal as well as the interest. In the case of a usufructuary mortgage, the mortgagor and the mortgagee agree that the entire amount due by the mortgagor to the mortgagee should be recouped by the mortgagee by the enjoyment of the usufructs from the mortgaged property over a specified number of years. The document may not refer to any interest payable on the principal, even though an element of interest and its rate and income from the property might have gone into their calculation, when the parties determined the number of years during which the mortgagee was authorized to remain in possession of the mortgaged property for the purpose of reimbursing himself.