Define: Equity Of Redemption

Equity of redemption refers to the right of a mortgagor to reclaim their property by paying off the outstanding mortgage debt, even after defaulting on the loan.

Equity of redemption is a common law principle that allows the mortgagor to redeem the property, while statutory redemption is a right provided by specific state laws that allow the borrower to reclaim the property within a certain period after foreclosure.

In most cases, the lender cannot refuse the equity of redemption. However, they may impose certain conditions, such as paying off the outstanding debt, interest, and any additional costs incurred.

The time limit for exercising the equity of redemption varies depending on the jurisdiction and the terms of the mortgage agreement. It is important to consult with a legal professional to understand the specific time limits applicable to your situation.

The lender may charge additional fees during the equity of redemption period, such as interest on the outstanding debt and any costs incurred for maintaining the property. These fees are typically outlined in the mortgage agreement.

If the borrower fails to exercise the equity of redemption within the specified time, the lender may proceed with foreclosure and sell the property to recover the outstanding debt.

In some cases, the borrower may be able to sell the property during the equity of redemption period. However, the sale must be conducted in accordance with the terms of the mortgage agreement and any applicable laws.

The lender generally cannot refuse to accept payment during the equity of redemption period if the borrower offers to pay off the outstanding debt, interest, and any additional costs. However, the lender may impose certain conditions for accepting the payment.

The borrower may be able to negotiate the terms of the equity of redemption with the lender, such as extending the redemption period or modifying the repayment terms. However, the lender is not obligated to agree to any changes.

Exercising the equity of redemption allows the borrower to reclaim their property, but it also requires them to pay off the outstanding debt and any additional costs. Failure to do so may result in foreclosure and the loss of the property.