What is a mortgagor?
A mortgagor is the home loan borrower. A mortgagor can be an individual or multiple borrowers who jointly own the property and pledge it as collateral for a mortgage loan.
The mortgagor agrees to pay back the total amount borrowed (plus interest) by a specific date, called the maturity date. Generally, mortgagors are required to make set monthly payments throughout the loan term.
Mortgagor responsibilities
“The main responsibility as a mortgagor is to make sure that you make on-time payments,” said Sarah DeFlorio, vice president of mortgage banking at William Raveis Mortgage. “I would highly recommend setting up the autopay options to avoid late payments, which can have a drastic impact on your credit and also your ability to get a new loan.”
The mortgagor is also responsible for paying annual property taxes. If you miss your tax payment, you could have a lien placed on your property for the unpaid taxes. This could result in foreclosure if the debt remains unpaid.
As a mortgagor, you’ll also need to take out a homeowners insurance policy on the property. Homeowners insurance protects you from financial losses resulting from an accident or disaster. It also guards the lender’s interests, making the home a more secure form of collateral for the loan.
Your responsibilities as a mortgagor should be detailed in the mortgage agreement, so review this document carefully before you sign. For example, the mortgagor usually has a legal obligation to preserve and maintain the property (like repairing damage that could result in the home’s value decreasing).
Mortgagor rights
As the mortgagor, you don’t own the home free and clear while you are still in a loan contract. However, this does not mean that you are in a similar agreement as a landlord and tenant. You have the right to occupy, use and make changes to the property while making timely payments.
You also have the right as the mortgagor to sell or rent out the property at any time, unless specific guidelines stating otherwise are in place through a homeowner’s association (HOA). Additionally, you can refinance to change lenders, extend the loan term or get a better rate.
The mortgagee can only take legal action against you if you default on your mortgage.
» MORE: Homebuying checklist
What is a mortgagee?
The mortgagee, also known as the mortgage lender, finances the mortgage loan. A mortgagee can be a bank, credit union or online mortgage lender.
Mortgagee responsibilities
The mortgagee is responsible for several parts of the mortgage process, including:
- Loan approval
- Setting the loan terms
- Setting the interest rate
- Setting the maturity date
To grant loan approval, the mortgagee will collect and review documentation the mortgagor submits (e.g., bank statements, W-2s). The mortgagee then uses this information to complete the underwriting process, which is a thorough review of the required financial documents to determine the borrower’s loan eligibility.
The mortgagee also files the necessary paperwork to create a perfected lien on the home. This protects the mortgagee in the event of default; essentially, it establishes that the lender (mortgagee) can legally sell the property if the borrower (mortgagor) doesn’t pay back the loan.
Another mortgagee responsibility is to confirm that the mortgagor maintains a homeowners insurance policy. Usually, the mortgagee collects part of the mortgagor’s monthly payment to put in an escrow account for this purpose. The funds in escrow are then used to pay the annual insurance premium and property taxes. Escrow accounts help the mortgagee guarantee these are paid in full each year.
» MORE: How to choose a mortgage lender
Mortgagee rights
If the mortgagor fails to make timely mortgage payments or breaches any other terms of the mortgage agreement, the mortgagee has the right to enforce the agreement. This includes taking appropriate legal action, such as initiating foreclosure proceedings.
In the event of a mortgage default, the mortgagee typically has the right to foreclose on the property pledged as collateral.
The mortgagee may have the right to sell or transfer the mortgage to another financial institution or entity. It is common for mortgages to be sold, but this will not affect the borrower’s obligations or terms of the loan.
» MORE: How does a mortgage work?
Mortgagor vs. mortgagee
To help you get a better understanding of how the mortgagor and mortgagee have opposing positions in a mortgage agreement, here’s a chart that compares the two side by side. It reviews the definition of a mortgagor and mortgagee as well as the responsibilities and rights of both parties.
| Mortgagor | Mortgagee | |
|---|---|---|
| Definition | Borrower of the home loan | Lender of the mortgage loan (typically a bank or financial institution) |
| Responsibilities | ||
| Rights |
» LEARN MORE: Mortgage lender vs. bank
Risks for mortgagor and mortgagee
While both mortgagors and mortgagees have responsibilities, they also both assume risks.
The mortgagor risks defaulting on the loan and losing their home if they’re unable to keep up with mortgage payments, which can also affect their credit score and ability to get approved for new credit in the future.
The mortgagee risks financial loss if the mortgagor defaults on the loan.
Mortgagee vs. mortgage servicer: What’s the difference?
Another term you might see during the homebuying process is “mortgage servicer,” which is not the same thing as a mortgagee.
While the mortgagee is the actual lender, a different company, the mortgage servicer, may take over day-to-day tasks affiliated with your loan. The servicer processes your loan payments, keeps track of the principal and interest you’ve paid on your loan, and can answer questions you may have.
If you don’t know who your loan servicer is, check your monthly mortgage statement to see if it’s listed there. If not, you can call the MERS Servicer Identification System at 888-679-6377, or look it up on the MERS Servicer ID site.
FAQ
How does a mortgagee approve a home loan?
When a prospective borrower applies for a home loan, the mortgagee assesses the borrower's creditworthiness by reviewing factors such as their credit score, income, employment history, debt-to-income ratio and overall financial stability. The mortgagee also evaluates the property's value and condition to determine the loan-to-value (LTV) ratio.
Based on this evaluation, the mortgagee decides whether to approve the mortgage application and, if so, on what terms, including the loan amount, interest rate and repayment schedule.
Can a mortgagor change mortgage terms?
For most loans, the mortgagor (borrower) is not allowed to change the mortgage terms once all of the paperwork is signed. If the mortgagor wishes to modify the mortgage terms after the agreement is in place, they need to negotiate with the mortgagee and potentially refinance the mortgage to establish new terms.
What options do mortgagors have if they cannot afford to repay the mortgage?
Mortgagees (lenders) may offer a loan modification, forbearance or other assistance programs to help borrowers who are experiencing financial difficulties and risk defaulting on their mortgages. It is important to contact your lender before you miss a payment.
Bottom line
The mortgagor is the individual borrowing money to buy a home, and the mortgagee is the mortgage lender. If you plan to buy a home in the future, knowing the roles of both the mortgagor and the mortgagee can help you better understand how the mortgage process works.
» READ MORE: Mortgage vs. deed of trust
Article Sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- Legal Information Institute, Cornell Law School, “Mortgagor.” Accessed Jan. 27, 2026.
- Legal Information Institute, Cornell Law School, “Mortgagee.” Accessed Jan. 27, 2026.
- Consumer Financial Protection Bureau, “What's the difference between a mortgage lender and a mortgage servicer?.” Accessed Jan. 27, 2026.
