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Hourse Calls: Mortgagor, Mortgagee

Edith Lank on

Dear Edith: I'm studying for my real estate license, and last week, we discussed mortgages. I still can't get "mortgagor" and "mortgagee" straight in my mind. I told our professor that I'd email you to see whether you could help. By the way, we sometimes talk about your column in class.

Wish me luck on the exam. -- L. C.

Answer: Perhaps the confusion comes because we all talk about "getting a mortgage" to buy property. What we really need is money. What we get is a loan. We don't get a mortgage at all. On the contrary, we sign a mortgage (in some states, a trust deed) that gives the bank a claim against the property, along with a bond or note, which is a personal promise to repay. We hand the bank the mortgage and the note; it takes it and in return gives us a check.

Words that end in "er" and "or" apply to the one doing the action -- the buyer, the seller and, as we are signing that document, the mortgagor. We are mortgaging the property.

A word ending in "ee" applies to the one who receives the action. The lender accepts our signed mortgage, receives it, holds it and is, therefore, the mortgagee.

If that doesn't help, how about this? The word "borrower" has two o's in it, and so does "mortgagor." The word "lender" has two e's, and so does "mortgagee."

 

Good luck with the exam.

New Landlord

Dear Edith: I am a new owner of a duplex rental property, and I was hoping you could give advice on how to capitalize on this investment when I submit my taxes. Also, what implications can I expect when I sell the property? -- Anonymous

Answer: Congratulations on your new career as a real estate investor.

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