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A Mortgage Agreement is a legally binding contract used in Indonesian property transactions when a borrower pledges real estate as security for a loan. Under Indonesian Civil Code regulations, this document establishes the bank's right to claim the property if the borrower defaults on their payment obligations.

The agreement must be registered with the local land office (Badan Pertanahan Nasional) and details critical terms including the loan amount, interest rates, payment schedule, and property specifications. It provides essential protection for both lenders and borrowers while complying with Indonesia's Mortgage Law No. 4/1996, which governs all land-based security rights.

Use a Mortgage Agreement when buying property in Indonesia with bank financing. This essential document comes into play the moment you secure a home loan, protecting both you and the lending bank throughout the entire financing period. It's particularly crucial for first-time homebuyers using government-subsidized mortgage programs.

Indonesian banks require this agreement before releasing any funds for property purchases. The timing matters—you'll need it ready before the property handover date, along with your notarial deed and land certificate. Many property developers and real estate agents now help coordinate this process with preferred banking partners to streamline the transaction.

• Home Loan Agreement: Standard bank-issued mortgage for residential properties, typically offering the most competitive interest rates and government-backed protection.
• Private Mortgage Contract: Used for direct lender-to-borrower financing without bank involvement, common in family property transactions.
• Mortgage Loan Contract: Comprehensive agreement for commercial properties, featuring more complex terms and collateral requirements.
• Mortgage Modification Agreement: Adjusts existing mortgage terms during financial hardship or rate changes.
• Seller Financed Mortgage Contract: Property owner provides direct financing to buyer, popular in rural property transactions.

• Borrowers (Debtors): Individuals or companies purchasing property who need financing, responsible for making regular payments and maintaining the mortgaged property.
• Banks (Creditors): Financial institutions providing the mortgage loan, drafting the agreement terms, and holding the security rights.
• Notaries: Licensed professionals who authenticate the agreement, ensure legal compliance, and handle registration with land authorities.
• Property Developers: Often facilitate mortgage arrangements between buyers and partner banks for new developments.
• Land Office Officials: Government representatives who record and register the mortgage rights in the national land registry.

• Property Details: Gather complete land certificate information, property address, and building specifications from the seller.
• Financial Terms: Document loan amount, interest rate, payment schedule, and any special conditions from your bank.
• Identity Documents: Collect KTP (ID cards), family cards, and marriage certificates (if applicable) from all parties.
• Legal Verification: Check property ownership status and encumbrances at the local land office.
• Agreement Structure: Use our platform to generate a compliant template that includes all mandatory Indonesian mortgage clauses.
• Notarial Review: Schedule an appointment with a licensed notary for document authentication and registration.

• Party Information: Complete legal names, addresses, and identification numbers of borrower and lender.
• Property Description: Detailed land certificate number, property boundaries, and building specifications.
• Loan Terms: Principal amount, interest rate, payment schedule, and duration of the mortgage.
• Security Rights: Clear statement of the bank's rights over the property under Law No. 4/1996.
• Default Provisions: Specific conditions constituting default and foreclosure procedures.
• Insurance Requirements: Mandatory property insurance coverage and beneficiary details.
• Governing Law: Reference to Indonesian Civil Code and relevant mortgage regulations.
• Execution Clause: Notarial deed requirements and registration procedures.

A Mortgage Agreement differs significantly from an Asset Purchase Agreement in Indonesian property transactions. While both deal with property transfers, they serve distinct purposes and have different legal implications under Indonesian law.

• Primary Purpose: Mortgage Agreements secure a loan using property as collateral, while Asset Purchase Agreements document the direct sale and transfer of property ownership.
• Legal Framework: Mortgage Agreements fall under Law No. 4/1996 on Land Mortgage Rights, while Asset Purchase Agreements operate under the Civil Code's sale provisions.
• Duration: Mortgage Agreements remain active throughout the loan period, but Asset Purchase Agreements conclude once the property transfer is complete.
• Party Relationships: Mortgages involve ongoing lender-borrower obligations, whereas Asset Purchase creates a one-time seller-buyer transaction.
• Registration Requirements: Mortgages must be registered with the land office as a security right, while Asset Purchases require deed transfer registration for ownership.