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Equity Of Redemption
Once the debt is paid off, the mortgage is said to be discharged and the property redeemed.
This right of a mortgagor is written in law and not a term that is offered by a lender to a borrower.
However, sometimes loan contract include a redemption clause that serve to inform the borrower of it’s existence.
But borrowers can often mistake it as a right provided by the lender.
In some cases, debt settlements and short sales can be agreed between borrowers and lenders.
While the result of these events also enable a borrower to retain his interest in the property, they are not considered as redemptions in definition.
The term redemption can also be confused with prepayment of mortgages. They mean different things.