Usufructuary Mortgage
Like the name suggests there is something special with this loan. In reverse mortgage or normal mortgage the house submitted as collateral can be used by the borrower or mortgagor. The person can avail all benefits or earnings from the property. But in a Usufructuary Mortgage the lender will take hold of the property and will receives all the income from the property until the mortgagor repays the loan. The owner only keep the title deeds himself during loan period.
What are the Basic Characteristic of Usufructuary Mortgage?
According to law this mortgage is supported by the Transfer of Property Act, Section 58, Sub section d, the lender will enjoy the benefits from the property. The characteristics are as follows:
- The full possession of property is transferred to the lender after availing loan
- The lender will enjoy all benefits from the property until the borrower repays the loan
- The property can be obtained back once the borrower returns the loan or the loan amount is collected back from the property income (such as rents, lease etc. )
- Mortgage value above Rs. 100/- needs a mandatory registration according Indian law.
Who is benefitted?
It is subjective question because this mortgage can favor both lender as well as borrower according the property value. If the property has constant source of income like rents, then it favors borrower else the lender.
