A mortgage deed is a legal document that gives the lender an interest in a property when you take out a loan backed by the property. A mortgage deed is a legally binding agreement, using property as collateral for a loan. When you purchase a home, you make payments on a home loan. The mortgage deed is the paperwork you sign that allows the lender to put a lien on the property until the loan is paid.

When people say they make a monthly mortgage payment, they actually mean they make a monthly loan payment while the mortgage deed secures the property for the lender. If a borrower doesn't pay back a loan in accordance with the agreement, the lender can foreclose and take possession of the land or have it auctioned off.

When It Is Used: 1.If you are loaning money to another person or business and want to hold an interest in certain property they own as security until they repay their debt. 2.If you are borrowing money and want to offer property you currently own as security to the lender that you will repay the debt in full or they can take claim on the property.

Parties: The person who transfers an interest in the property is called the mortgagor; the person to whom the interest is transferred is called the mortgagee. The mortgagor must be competent to transfer. Thus a minor cannot be a mortgagor but a minor can be a mortgagee. .