Firstly, an equitable motgage is creating a charge on the property by handing over the titledeeds of the property by its owner to the lender and orally confirming of handing over the titleneeds for the intent to create a charge on the property for the amount borrowed.
A registered mortgage is registering the document creating the charge on the property by the mortgagor in facor of lender, with sub-registrar.
Equitable mortgage will not incur any stamp duty. Registered mortgage will entail stamp duty based on the amount lent or amount for which charge has been created. Sometimes, amount lent may be more but mortgage will be registered for a nominal amount to avoid stsmp duty.
Nowadays, registered mortgages are preferred even by banks as it is more fool proof and indicates the encumbrances in the encumbrance certificate issued by sub-registrar.
A registered mortgage is registering the document creating the charge on the property by the mortgagor in facor of lender, with sub-registrar.
Equitable mortgage will not incur any stamp duty. Registered mortgage will entail stamp duty based on the amount lent or amount for which charge has been created. Sometimes, amount lent may be more but mortgage will be registered for a nominal amount to avoid stsmp duty.
Nowadays, registered mortgages are preferred even by banks as it is more fool proof and indicates the encumbrances in the encumbrance certificate issued by sub-registrar.
Additionally, In an equitable mortgage (EM), the owner has to transfer his title deed to the lender, creating a charge on the property. The owner verbally confirms the intent of creating a charge on the property. No legal procedure is involved in an EM, but it is considered in the interest of justice (under equity).
And, In a Registered Mortgage, the borrower has to create a charge on the property with the Sub-Registrar through a formal, written process as a proof of transfer of interest to the lender as security for the loan. It meets all the necessary legal requirements to create mortgage or a charge. If the borrower repays the loan according to the terms & conditions of the home loan agreement, the title of the property is given back to the borrower. The rights of the lender (as created during the legal process) will stand null and void on the property. However, if the borrower fails to fully repay the loan (i.e. interest plus principal), the lender will have the right to take possession of the property.
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