BANK TERMS

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jyothsna

jyothsna (Querist)
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18 June 2009 what are the differences btw the terms CHARGE,PLEDGE, MORTGAGE, HYOPOTHECATION, REVERSE MORTGAGE....

CA. Dashrath Maheshwari

CA. Dashrath Maheshwari (Expert)
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18 June 2009 Hypothecation:
The pledge of property (real estate) and or assets to secure a loan. Hypothecation does not transfer title, however it does provide the right to sell the pledged property in the event of default.

PLEDGE: giving rights in a property as security without having to give up possession of it. (same as above).

CA. Dashrath Maheshwari

CA. Dashrath Maheshwari (Expert)
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18 June 2009 Mortgage:
A written instrument that creates a lien upon real estate as security for the payment of a specified debt.

Reverse Mortgage:
A mortgage used by the elderly that provides income as long as they live in exchange. Payments made cause the loan principal to increase.

CA. Dashrath Maheshwari

CA. Dashrath Maheshwari (Expert)
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18 June 2009 Creation of security by way of any of the above is called creation of charge.

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