Mortgage
Property guarantee registered on the property to secure payment of the life annuity to the seller.
Full definition
A mortgage is a real security relating to a property, used in the life annuity to guarantee payment of the annuity. It allows the creditor (the seller) to have the property seized and sold if the debtor (the buyer) does not pay.
In a sale via life annuity, a conventional mortgage may be registered in addition to the seller's lien. It generally covers the total amount of the capitalised annuities and protects the annuitant against any payment default.
The mortgage is published at the mortgage registry and remains registered until the annuitant's death or until release. It reassures the seller, particularly when the buyer is a legal person or an investor. The mortgage registration fees are generally borne by the buyer.
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Related terms
Seller's Lien
Legal guarantee giving the seller priority of payment over the property sold in the event of the buyer defaulting.
Rescission Clause
Contractual provision allowing automatic cancellation of the sale in the event of non-payment of the annuity by the buyer.
Lifetime Mortgage
Loan granted to senior homeowners, secured by their property, repayable only on death or sale.
Sale with Right of Repurchase
Sale with a repurchase option allowing the seller to recover their property within a set period, a solution to avoid seizure.
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