Mortgagee vs Mortgagor: What’s the Difference?

Mortgagee and mortgagor often get confused. If you ever had a chance to closely review mortgage closing documentation, you probably have seen these two words throughout the paperwork. The mortgagee and mortgagor are essentially the two parties involved in a mortgage transaction. One is the lender and one is the borrower.

The Mortgagee

The mortgagee is the lender who issues the mortgage. It is usually a bank or other financial institution who provides the mortgage (financing) to a borrower for the purpose of buying a home or property.

The Mortgagor

The mortgagor is the borrower in a mortgage transaction. They are the person who acquires a mortgage to buy a property. The mortgagor is responsible for making payments on the mortgage to the mortgagee. If the mortgagor stops making payments, the mortgagee can take control of the property through a foreclosure in many cases.

Why the Confusion

The difference between mortgagee vs mortgagor is obviously the ending of the words being “ee” and “or”. If you look at other related words that end in “ee” and “or” you will understand where some of the confusion comes from when trying to figure out the meaning of mortgagee and mortgagor.

If you look at the word lessee, you might expect this to mean the landlord since a mortgagee is a lender. However, this is not the case. A Lessee is actually the renter. A lessor is the landlord.

How about grantee vs grantor, which are also words we see in mortgage transactions? A grantee is buyer who is granted a property. The grantor is the seller who transfers the property to the buyer.

How to Remember Mortgagee vs Mortgagor

You can remember the difference between mortgagee vs mortgagor by looking at the letters in lender vs borrower. The word mortgagee ends with two e’s and lender contains two e’s. You can associate mortgagee with a lender because they both contain two e’s. You can do the same with the two o’s in mortgagor and borrower.

Still Confused?

If you come across a document that references a mortgagee or mortgagor and you can’t remember which one is the lender and which one is the borrower, simply ask a mortgage profession. They realize that the wording in some mortgage documents can be confusing. Ultimately, you are paying a significant amount of money for a mortgage, so it is important to full understand what you are reading and/or signing.