What is a leasehold mortgage?


Quick Answer

A leasehold mortgage is a type of mortgage designed to financially help a person leasing a property, as stated by Pepper Hamilton law firm. This type of mortgage is often used for commercial properties.

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Full Answer

Typically, a leasehold mortgage is designed to assist in the new development of a building or property. When a person or company takes out a leasehold mortgage, the debtor is responsible for paying the lender and the rent associated with the lease. The leasehold mortgage works similar to a normal mortgage because if the borrower does not pay according to the terms, the mortgage holder can sell the property to recoup the money.

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