• This is the party that will give up the pledged asset in case of default.
• Is the borrowing party in a mortgage transaction.
| ||Embedded terms in definition|
| ||Referenced Terms|
| ||Embedded option: Is an option whose characteristics are implied but not explicitly specified. One notable example is the option granted a Mortgagor (home owner) by the lender. The mortgagor has the right to prepay the mortgage at any time but is not required to do so in any specified manner.An option that is part of the structure of a bond that provides either the bondholder or issuer the right to take some action against the other party, as opposed to a bare option, which trades separately from any underlying security.|
| ||Prepayment: A payment made ahead of the scheduled payment date.Is an additional principal amount in excess of the required amount paid by the Mortgagor to reduce the open mortgage balance.|
| ||Prepayment option: All mortgages contain a prepayment option. The prepayment option gives the Mortgagor (i.e., the homeowner) the option to get out of the obligation of the mortgage by "prepaying all of the remaining principal on the mortgage. The mortgagor can exercise this option at any time during the life of the mortgage.|