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Simple English definitions for legal terms
Welsh mortgage
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A quick definition of Welsh mortgage:
A Welsh mortgage is a type of loan where the borrower transfers ownership of their property to the lender as security for the debt. The lender collects rent from the property to pay off the interest, and any extra money goes towards reducing the principal. The borrower can redeem the property at any time, and the lender cannot force them to pay back the loan or foreclose on the property. It was commonly used in Wales and Ireland, but is not used much anymore.A more thorough explanation:
A Welsh mortgage is a type of mortgage that was once common in Wales and Ireland. It involves the transfer of title and possession of the property to the mortgagee, who takes the rents and profits and applies them to the interest. There is often a stipulation that any surplus will reduce the principal. The mortgagor is not obligated to pay the debt and cannot be compelled to redeem, but may redeem at any time. The mortgagee cannot foreclose the right to redeem because no time is fixed for payment.
Example: John owns a property in Wales and takes out a Welsh mortgage with a lender. He transfers the title and possession of the property to the lender, who takes the rents and profits and applies them to the interest. John is not obligated to pay the debt and can redeem the property at any time.
This example illustrates how a Welsh mortgage works, where the mortgagor transfers the title and possession of the property to the mortgagee, who takes the rents and profits and applies them to the interest. The mortgagor is not obligated to pay the debt and can redeem the property at any time.