Also referred to as a mortgage loan, is used by purchasers of real property to raise capital for the purchase, or by existing owners to raise funds for any purpose while putting a lien on the property being mortgaged. The loan is secured on the borrower’s property, putting in place a legal mechanism which will enable the lender to take possession and sell the secured property to pay off the loan in the event that the borrower defaults on the loan or otherwise fails to abide by its terms.
A formal promise by one party (the guarantor or surety) to another party (the creditor) to accept responsibility of a third party’s (the principal debtor) debt, if that third party cannot or refuses to pay it.
A legal document, usually in writing, giving details of a formal legally binding agreement, between two or more different people or groups. To be legally binding it must contain certain elements:
it must contain an offer made by one party and accepted in its entirety by the other,
it must include some form of consideration whether it be money, goods or services, and
it must be properly signed by all parties to it, and dated.
A contract in which all elements of a contract are specifically stated (offer, acceptance and consideration), and the terms are set out, as compared with an implied contract in which the existence of the contract is assumed by the circumstances.
