National Real Estate Practice Exam

Which party is the seller in a mortgage agreement?

1. Mortgagee

2. Mortgagor

3. Vendee

4. Grantee

The correct answer is: Mortgagor

In a mortgage agreement, the seller is referred to as the mortgagor. This term identifies the borrower who is taking out a loan to purchase property. When entering a mortgage, the mortgagor gives a mortgage deed to the lender, known as the mortgagee, as a security for the loan. This relationship is essential in real estate transactions because it delineates who is responsible for the loan obligations and who retains ownership of the property until the mortgage is paid off. The mortgagor typically remains in possession of the property and is responsible for making monthly payments to the lender. Once the loan is fully paid, the mortgage is released, and the mortgagor has clear ownership of the property. This distinction is crucial for understanding the roles of the parties involved in a mortgage agreement, particularly with regards to rights and responsibilities. The other terms mentioned—mortgagee, vendee, and grantee—represent different roles within real estate transactions. The mortgagee is the lender, the vendee typically refers to the buyer in a sales agreement, and the grantee is the individual to whom property rights are granted or transferred. Understanding these terms and their roles helps clarify the dynamics of real estate financing and transactions.