What is a Mortgage?

A lender making a loan that is to be used in connection with a purchase of real estate wants to be guaranteed the money will be paid back, and they want more than a signature on a promissory note. One security mechanism is for the borrower to use the real estate in question as security for the loan. That is, the borrower agrees that if he/she cannot make the payments on the loan, the lender can “look to the property” for repayment. The legal method by which this is done is called a mortgage. A mortgage is a document by which the borrower agrees that if he/she cannot make the payments on a loan, the lender may step in and sell the real estate and apply the proceeds of the sale to repay the loan. A Mortgage may also be known as a “Deed of Trust.”

The lender will require that the mortgage be filed with the County Clerk. The fee to file a mortgage is $40.00 plus $5.00 per page. You will also have to pay the Mortgage Tax. In Cayuga County the Mortgage Tax is figured as follows:

1% mortgage tax over $10,000.00 ¾% mortgage tax under $10,000.00 One or two family dwelling over $10,000.00 deduct $25.00.