REASONS FOR THE PREFERENCE OF LAND AS AGAINST OTHER PROPERTIES AS SECURITY FOR A LOAN

The reasons for this preference are not far-fetched as highlighted by Law Repository: 

1.Landed properties are more stable.

2.The value of land appreciates than the others, particularly in times of inflation.

3.Land is immovable and we can go to the land and inspect it physically.

4.It is easier for banks and other mortgagees to enforce their security in the case of landed properties than other properties.

In a mortgage transaction, the borrower is called “the mortgagor” while the lender is the “mortgagee”. Note that it is not out of place to use “borrower/lender” but we must be consistent in the use of language. A mortgage may be legal or equitable and in either case, the sole object of a mortgage as against related/similar transactions is that the interest in the property transferred by the borrower to the lender is subject to a proviso for redemption upon repayment of the loan. In practice, solicitors are involved in the negotiation, drafting and perfection of mortgages.

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