When to Use

  • You are lending money to someone to pay for real estate.
  • You are a borrower taking out a loan to pay for property.
  • You are helping a borrower or lender make a loan secured by real estate.

Other Names for This Document

  • Mortgage contract form
  • Deed of trust – Note that some states require you to use a deed of trust instead of a mortgage agreement. Both documents serve the same purpose with only a few differences. Our questionnaire will automatically give you the correct document for your state.

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Help Guide

LegalNature's mortgage agreement form allows you to quickly and easily customize an agreement that clearly sets out the rights and responsibilities of all parties to the mortgage. This help guide explains the various options and considerations when completing the agreement and provides a brief description of the key sections of the agreement.

Party Information

When completing the form, you will need to provide the name and address of each of the parties involved. Enter the details for the borrower, guarantor (if any), and lender. You may include more than one of any of these parties as needed.

Recording Information

Mortgage agreements usually need to be recorded with the appropriate government division, often the County Recorder's Office. The top of the form is used to indicate specific recording information. This includes the party responsible for preparing the agreement, the party requesting that it be recorded, and the party designated to receive confirmation and other information back from the recording office.

Grant and Conveyance

In the first substantive paragraph of your agreement, the borrower grants the lender title to the property as security for repayment of the property loan. This means the borrower must repay in full or the lender will be able to foreclose on the property and take complete ownership.

Legal Description

In this section you will enter one or more legal descriptions of the property. If you do not have the legal property description already, you can find it easily by contacting your County Register or Recorder of Deeds (by phone or online) and providing the property address or tax parcel number. You can also try looking at previously-recorded deeds, tax assessments, websites such as Zillow.com, your land title, or asking a licensed real estate attorney for help. Including multiple legal descriptions is recommended, if possible, in order to clearly identify the property.

Promissory Note Terms

This section provides an overview of the terms of repayment as specified in the promissory note for the mortgage loan. The terms specified here are for reference purposes only and will not modify the terms of the note. You can think of the difference between the promissory note and the mortgage agreement in that a mortgage agreement is a promise to give the property title to the lender if the borrower does not repay, while the promissory note spells out the specific terms of repayment (i.e. principal, interest, important dates, and penalties).

Borrower Representations and Covenants

Here, the borrower promises that it owns true and proper title to the property and has the right to convey the title to the lender. The borrower agrees to defend its property title against claims by third parties.


The borrower promises to repay the lender on time and in full, including any associate fees and penalties. The borrower may not make set-offs (deductions) on repayment for items the borrower believes the lender owes. The lender is not obligated to accept a partial payment from the borrower—for instance, a payment less than the monthly amount owed—and by accepting a partial payment, the lender does not become obligated to accept more partial payments in the future.

Terms and Conditions of Escrow Charges

Escrow charges are certain items that the borrower is legally obligated to repay before repaying the promissory note. This means they have legal priority. Examples include real estate taxes and property insurance premiums. In order to protect its interest in the property and ensure that these are paid on time, the lender will require these to be paid along with the regular mortgage payment.

The borrower is responsible for notifying the lender if it becomes delinquent in paying escrow charges. Unless one of the exceptions specified in this section applies, the borrower must also discharge—meaning repay and fully satisfy—any liens with priority over the mortgage. The best example is a prior mortgage against the property.


RESPA, or the Real Estate Settlement Procedures Act, is a federal law that prohibits lenders from charging unreasonable fees and requires them to provide borrowers with timely and accurate disclosures about the nature of the costs associated with the settlement process. This section is meant to ensure that the lender is held accountable for abiding by the requirements of RESPA.


You have the option of allowing prepayment of the loan when creating this agreement. If allowed, the borrower may prepay amounts greater than what is owed by the due date without incurring a penalty. However, making such payments will never relieve the borrower from its obligation to at least meet its minimum regular payment each period.


You have the option of including one or more guarantors when creating this agreement. A guarantor agrees to make payments on behalf of the borrower if the borrower is ever unable to meets its repayment obligations.

Property Insurance

This section gives the lender the option of requiring the borrower to maintain property insurance during the term of repayment, including fire, flood, earthquake, and hazard insurances. The borrower will be required to notify both the lender and the insurer of any insurance claims on the property. If the borrower fails to do so when required, then the lender may pay for the insurance itself and add those costs to the borrower's debt under this agreement.

Mortgage Insurance

If you choose to include this section when customizing your agreement, then the lender will have the option of requiring the borrower to maintain mortgage insurance. Mortgage insurance will reimburse the lender for any missed payments by the borrower, but will not relieve the borrower from its obligations under the agreement.

Events of Default

This section identifies the many ways that the borrower may default on its obligations under the agreement. Most importantly, the borrower must meet all its payment obligations on time and in full. A violation of any terms of the agreement is also an event of default. Other common ways to default include the borrower giving false or misleading information to induce the lender to enter into this agreement or if the borrower defaults on another lien on the property or incurs additional liens without the lender's consent.


In the event of a default, this section requires the lender to immediately notify the borrower of the default. If the default can be cured by the borrower, the borrower will be required to do so within the timeframe given by the lender. If the borrower fails to cure the default on time, then the lender has the right to accelerate all payments under the agreement. This means that all outstanding money owed becomes immediately due. Should the borrower fail to pay all money owed, then the lender may pursue its legal options for enforcing the agreement, possibly including foreclosing on the property.

Sale of Note

The borrower agrees that the lender may sell its interest in the promissory note and mortgage agreement without providing the borrower with prior notice. In this event, the borrower must also receive the name and address of any new servicer and any information required under RESPA. Any new servicer will still be required to abide by the terms of the promissory note and mortgage agreement.

Power of Sale

In the event of a default on the agreement, the lender may choose to foreclose on the property and sell the property without going through formal court proceedings. Under this process, the lender must notify the borrower of its choice to sell the property. The lender then typically circulates an advertisement in a local newspaper for the property and sells it to the highest bidder. The lender may also purchase the property itself at the auction.

Judicial Foreclosure

As opposed to the method described above, the lender also has the option to pursue foreclosure through the court system if permitted by the applicable law.

Executing the Agreement

In order to be legally valid, the agreement must be signed and dated in the presence of a notary public. While this is sufficient in most states, two witnesses are required in Florida, Connecticut, South Carolina, and Louisiana. In these states, a notary may act as one of the witnesses and the other witness must be at least 18 years old and have no interest in the transaction or familial relation to the parties.

Final Steps

Lastly, you should record the mortgage with the appropriate local office, typically called the County Recorder’s Office, Land Title Office, or County Clerk’s Office. As every county has its own specific filing requirements, we recommend contacting your local office to see if it requires any supplemental forms, whether it has any special requirements you need to complete, and also if you need help writing a proper legal description.

  • Leave all margins blank. Our mortgage agreement sets the margin default sizes at one inch except for the top of the first page, which is three inches to give extra space for official use only. Your local office will inform you whether you need to alter these dimensions.
  • Do not staple multiple pages together unless your local office specifically permits it.
  • All signatures on the document must be originals—not copied, printed, or stamped.

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Frequently Asked Questions

What is a mortgage?

A mortgage is a type of loan where the borrower agrees to pledge real estate as collateral for ensuring repayment to the lender. In a typical home mortgage, the homebuyer agrees to transfer ownership of the home to the bank if the bank does not receive payment in full and according to the terms of the mortgage agreement. The loan is said to be "secured" by the property collateral.

Who is the mortgagee and mortgagor?

In a mortgage agreement, the mortgagee is the party lending money (usually a bank) and the mortgagor is the party borrowing the money.

What is the loan principal?

The loan principal is the amount of money borrowed, not including interest. Interest is calculated based on the principal amount that remains due and outstanding.

Who is the guarantor?

A guarantor, as the name implies, guarantees repayment on a loan if a borrower defaults. Lenders may require a guarantor, especially if the borrower has poor credit.

What is a security interest?

A security interest is an interest in property—real estate or otherwise—that ensures that a debt is repaid or promise is fulfilled. If the party that grants the security interest fails to fulfill its obligation, then the holder of the security interest can normally take possession of the asset in question and sell it in order to recoup any losses. Security interest dramatically reduces the level of risk a lender takes on, thereby allowing for lower interest rates and other incentives to borrow. If a security interest is granted, the exchange is known as a 'secured transaction.

A common example of a security interest is a real estate mortgage or deed of trust. Under these agreements, a borrower pledges the home real estate as collateral for repayment of the home loan to the lender.

In a security agreement, the debtor secures the transaction using their own property as collateral. Common examples of collateral include bank accounts, stocks, bonds, inventory, equipment, accounts receivable, cars, art, and jewelry. If the debtor fails to repay according to the agreement, then the creditor (also known as the secured party) may keep or sell the collateral.

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