What are Mortgage Covenants?

Mortgage covenants are promises made under seal to do or not to do something regarding a mortgage. These legally binding commitments are typically included in the mortgage contract and can involve a variety of obligations, such as maintaining the property, paying property taxes, or ensuring that the property is adequately insured. The enforceability of covenants underlines their significance in the relationship between lenders and borrowers, as they protect the lender’s interest and ensure that the borrower adheres to specific stipulations throughout the duration of the mortgage.

Understanding mortgage covenants is crucial for anyone involved in real estate transactions, as they outline the responsibilities and restrictions placed on the property owner, which can ultimately impact financial planning and ownership rights.