Key takeaways

  • The mortgagor is the borrower of the loan. If you’re receiving the loan to buy a home, you’re the mortgagor.
  • The mortgagee is the lender — a bank, credit union or online lender, typically. This is the entity providing the funds via a mortgage to buy a home.
  • The mortgagee determines if the mortgagor qualifies for the loan. Once the loan is taken out, the mortgagor begins repaying the mortgagee.

Taking out a mortgage may seem like a daunting process for any prospective homebuyer, especially when the various words and terms the mortgage industry uses aren’t familiar. Two of the most important and common terms needed to understand the mortgage process are “mortgagor” and “mortgagee.”

What is a mortgagor?

When you apply for a home loan, you’re essentially borrowing money from a lender. A mortgagor is simply another word for the borrower. In the context of a mortgage purchase or home refinance loan, that means you.

“The mortgagor is the person, couple or group of people seeking a loan to purchase a home — also known as the buyer, borrower or homeowner,” says Rob Heck, senior vice president of mortgage at Morty, a New York City-based online mortgage broker.

The mortgagor is responsible for:

  • Repaying the loan in a timely fashion each month
  • Paying homeowners insurance and property taxes
  • Maintaining the home and property
  • Communicating with the mortgagee

Who is the mortgagee?

You may see the term “mortgagee” in your loan documentation and also in your homeowners insurance policy in the mortgagee clause. The mortgagee refers to the entity that is loaning you funds, whether you’re purchasing a new home or refinancing. The lender or mortgagee can be any financial institution specializing in mortgages, a bank or a credit union.

The mortgagee’s responsibilities can include:

  • Creating the loan
  • Paying out the funds to the seller
  • Managing an escrow account for the mortgagor’s property taxes and homeowners insurance
  • Foreclosing on the property if the mortgagor doesn’t make their payments

Mortgagor vs. mortgagee in the homebuying process

In the early stages of the home loan process, the mortgagee determines if a mortgagor qualifies for a mortgage loan. A few things that the mortgagee looks at include credit score, income, debt and other factors.

“As the mortgagor, you will need to provide supporting documentation, such as information about your income and assets,” says Maxwell. “Plus, you’ll want to understand how the monthly payments are calculated and how your mortgage payment fits into your monthly budget.”

Once the mortgagor is approved, the mortgagee will lend them a lump sum to buy or refinance a home. The mortgagor pays back the mortgagee every month in installments, including the principal borrowed plus a predetermined fixed or adjustable interest rate until the loan is paid off. A fixed-rate mortgage means the payment installment stays the same throughout the term of the loan, while an adjustable-rate loan can change after a set period.