What is a Mortgagor?
A mortgagor is an individual or business that borrows money to purchase property, using that property as collateral for the loan. In this arrangement, the mortgagor is responsible for making payments to the lender, known as the mortgagee, over an agreed-upon term. If the mortgagor fails to make the required payments, the mortgagee has the right to foreclose on the property.
For homeowners insurance purposes, the mortgagor holds an essential role, as insurance is typically required by the lender to protect the property in the event of damage. The mortgagor must ensure that the property is adequately insured, which helps safeguard both the borrower’s investment and the lender’s security.
In personal and business property insurance, being a mortgagor means maintaining coverage not only for potential losses like fire or theft but also meeting the requirements outlined by the lender. Failure to do so could result in default, and ultimately, foreclosure.
