As it is stated that mortgage is just like a contract. So, it must comply with all requirement of a valid contract. It is important for the mortgagor to be a competent party in a contract as per direction of the Contract Act. On the other hand this contract act also says that the mortgagee must be agreed for the mortgage for a lawful purpose

A mortgage can be formed under following conditions

• When the money advanced by the Bank
• When the money is advanced by way of loan or existing or future debt
• When the performance of an engagement giving to pecuniary liability is sufficient consideration of a mortgage.

Mortgagor will sign only those title deeds which is registered and have at lest attested by two witness and they have worth more than hundred. So for making a valid mortgage contract, there must be the principle more than hundred rupees. Even after then the following conditions are much important while making the mortgage contract valid.

(a) The mortgage will be valid only when the mortgagor signed the documents of mortgage and these documents should also be attested by the two witnesses.

(b) This written document is called a mortgage deed. The mortgage deed must be stamped. This deed must confirm the right of redemption to the mortgagor;

(c) The document must be registered, otherwise it will be ineffective.