The Simple Mortgage Agreement is a crucial legal instrument in Pakistan's property financing landscape, used when a property owner needs to secure a loan using their property as collateral while retaining possession. This document type is governed primarily by the Transfer of Property Act 1882 and must comply with local registration requirements and Islamic financing principles where applicable. The agreement details the creation of a mortgage charge, specifies the loan amount and repayment terms, describes the mortgaged property, and outlines the rights and obligations of both parties. It's commonly used by banks, financial institutions, and property owners for both residential and commercial properties. The Simple Mortgage Agreement differs from other mortgage types as it doesn't require the transfer of property possession to the lender, making it particularly suitable for properties that the owner needs to continue occupying or using.

1. Parties: Identifies and defines the Mortgagor and Mortgagee with complete details including name, address, and legal status

2. Background: Explains the context of the mortgage, including the Mortgagor's ownership of the property and desire to obtain financing

3. Definitions: Defines key terms used throughout the agreement including Property, Mortgage Amount, Security, Default, etc.

4. Creation of Mortgage: Establishes the mortgage relationship and specifies the property being mortgaged as security

5. Mortgage Amount and Payment Terms: Details the principal amount, payment schedule, and applicable profit rate/interest

6. Security and Property Details: Describes the mortgaged property in detail and confirms the Mortgagor's right to mortgage it

7. Representations and Warranties: Mortgagor's confirmations regarding property ownership, absence of encumbrances, and authority to enter agreement

8. Mortgagor's Covenants: Ongoing obligations including property maintenance, insurance, payment of taxes, and restrictions on property use

9. Events of Default: Lists circumstances constituting default and consequences thereof

10. Remedies: Mortgagee's rights and remedies in case of default, including power of sale

11. Term and Discharge: Duration of the mortgage and conditions for discharge upon full repayment

12. General Provisions: Standard clauses including notices, amendments, governing law, and dispute resolution