Key takeaways

  • Mortgagor definition: The mortgagor is basically the borrower. If you're getting the loan to buy a home, you're the mortgagor.
  • Mortgagee definition: The mortgagee is the lender — a bank, credit union or online lender, typically. The entity providing the mortgage money.
  • The mortgagee determines if the mortgagor qualifies for the loan. Once the loan is taken out, the mortgagor begins repaying the mortgagee.

If you’re a prospective homebuyer, taking out a mortgage may seem daunting — especially if you aren’t familiar with the various words and terms the mortgage industry uses. Two such concepts are “mortgagor” and “mortgagee.”

What is a mortgagor?

A mortgagor is simply another word for the borrower. In the context of a mortgage purchase or 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, vice president of mortgage at Morty, a New York City-based online mortgage broker.

The mortgagor is responsible for:

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

Who is the mortgagee?

The mortgagee is another word for the bank or lending institution providing the funds to purchase a home or to refinance.

“The mortgagee has rights to the real estate collateral associated with securitizing the loan, providing them with protection against default,” says Heck.

In other words, the mortgagee has the right to foreclose on and repossess your home if your mortgage payments go unpaid.

“These terms can be confusing because most people think of the creditor or the grantor as the institution extending something, so many believe the word ‘mortgagor’ would follow the same logic,” says Jared Maxwell, vice president of Consumer Direct Lending at Middletown, Rhode Island-headquartered Embrace Home Loans.

The term “mortgagee” appears not only in your loan documentation, but also in your homeowners insurance policy in the “mortgagee clause,” which describes the lender attached to the property, says Maxwell.

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
Mortgage
To help you remember the difference between mortgagee vs. mortgagor, consider that words ending in “er” and “or” typically apply to the person doing the action — in this context, the buyer or mortgagor who takes out a loan and pays the mortgagee. Words ending in “ee” pertain to the party receiving the action. A mortgagee receives money from a mortgagor.

Mortgagor vs. mortgagee in the homebuying process

In the early phases of the home loan process, the mortgagee determines if a mortgagor qualifies for a mortgage loan based on their credit, income 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 of time.

Additional reporting by Andrew Dehan