What is Mortgage Loan?
A mortgage loan is one in which you secure funds by pledging your property. The interest rates on mortgage loans range from 8.15% to 11.80% p.a. Usually, the amount of funding you can avail will be up to 60% of the registered value of the property. Some banks also offer mortgage loans up to Rs.10 crore. The repayment tenure for mortgage loans can be up to 15 years.
Features and Benefits of Mortgage Loan
A mortgage loan comes with the following attractive features and benefits:
- It is a cost effective way of borrowing. Normally, you can take a mortgage loan for a longer duration and pay off your repayment by using smaller monthly EMIs.
- Mortgage loans charge lower rates of interest on your borrowings than any other loans.
- Mortgage loan is a secured loan. It is secured against your property. The bank or lender has the right to repossess your property if you can’t repay your loan.
- A mortgage loan helps you buy your own house. You can afford to buy a home with the help of this loan and be the sole owner of your property once repayment is over.
- You can get loans against under construction property, fully constructed property, freehold residential and commercial properties for:
- Get loan for a longer tenure.
- Repay your loan with a simple repayment process through monthly instalments. You can pay it off by paying smaller monthly EMIs.
- Mortgage loans are offered at attractive interest rates.
- Enjoy an easy and hassle free documentation process.
- You can get a mortgage loan anywhere in India with integrated branch network provided by banks.
- You can choose from a number of interest rates to pay off your loan. They include - floating rates, fixed interest rates, interest-only mortgage and Payment option ARMs.
- Get access to a higher amount of funds.
- Mortgage loan can be sectioned even before your select your property.
- You can apply for it both online and offline and enjoy doorstep services.
- Both residential and commercial properties are accepted as collateral for mortgage loan.
- Funds received from a mortgage loans can be used for business as well as personal needs.
- Self –employed individuals get customized loan options.
Frequently Asked Questions
Can I apply for a mortgage loan to finance other personal or business needs?
Yes. The sanctioned loan amount can be used for a wide range of financial needs, both personal and business. However, it’s important to understand what expenses can be catered to with this loan. Read the fine print and if you have any queries, get in touch with the lender for additional information. For instance, some banks don’t offer a mortgage loan for individuals who are involved in property development.
Who can apply for a mortgage loan?
The type of borrower who can apply for this loan varies from bank to bank. For instance, most banks offer this loan for both salaried and self-employed individuals. Resident Indians and NRIs are also eligible for a mortgage loan. However, there may be additional criteria you’ll have to meet to be eligible for a mortgage loan.
What is the maximum loan I can get against my property?
The margin offered against your property differs from bank to bank, and also the type of property you’re submitting as collateral. The average margin offered by banks and financial institutions is between 40% and 60%. Some banks also offer a 70% margin.
What types of property can be considered as security for a Loan Against Property loan?
Most banks require you to submit either residential (flat, house) or commercial property (building, building with land) as collateral. In some cases, you can also pledge your plot of land as security. However, this has to be non-agricultural land. You cannot use your industrial or agricultural property as security for a LAP.
How do I clear the monthly repayments for my mortgage loan?
You can either make your payments with post-dated cheques or opt for a standing instruction like NACH. This ensures you don’t miss your due date and pay your outstanding balance on time. If you miss your payment, you will be charged a penalty fee.
Can I foreclose my mortgage loan?
Yes, you can foreclose your mortgage loan. However, you will have to clear the entire loan amount before requesting for foreclosure. Do note that banks charge a certain amount as pre-closure fees. The amount varies from lender to lender, so ensure you’re aware of all the charges before proceeding with foreclosure of your mortgage loan.