A mortgage loan in easy terms is the loan in which you pledge a property and avail a loan against it. The property mortgaged acts as collateral until the borrower has repaid the loan amount including the interest. In other terms, a Mortgage loan is a loan against property.
Home and commercial property loans can be used only to purchase a residential home or commercial space. A loan against property can be used for various purposes such as education, medical expenses, debt consolidation, etc.
Mortgage loans in India are very common and the most popular secured loan. This loan has endless features, benefits, and variety in its offers.
Features of Mortgage loans:
Let us have a look at the features of mortgage loans:
- Minimal documents
The documents required to get mortgage loans are very basic, and the disbursal process is very quick.
- High-value loans
A person can get a high amount as mortgage loans. For a salaried person, the loan amount is up to Rs 1 crore, and for a self-employed person, it is up to 5 crores.
- Longer repayment tenor
The repayment tenure is high in mortgage loans, ranging from 2 to 18 years for salaried and self-employed customers.
- Interest rates
Mortgage interest rates are lower than the interest rate of other unsecured loans.
- Simple eligibility criteria
The eligibility criteria for a mortgage loan can be fulfilled easily. The age limit is between 28-58 years if you are salaried and 25-70 years if you are self-employed. A good CIBIL score will add an advantage to getting a quick loan approval process.
Different Types of Mortgages for loan:
- Loan against Property
It is offered for commercial and residential properties. The borrowers need to guarantee their property to get funds from lending institutions. The repayment of this type of loan is completed on an EMI basis.
- Commercial purchase
This loan is popularly taken by business people and entrepreneurs. They take such loans to purchase shops, commercial complexes, and office space. Funds from this loan can be only used to buy the property.
- Home loan
These are the most common loans in India. Consumers apply for small, medium, and big size home loans. The advantages are interest rates, convenient tenure, and tax benefits. You can take a home loan to purchase land to build a house or to buy under-construction property. The loan can be taken for new or resale properties. The funds that are taken as a loan have to be necessarily used for the house only and cannot be used for any other personal or business needs.
- Reverse mortgage
This mortgage is a good way for a senior citizen to receive funds if they need liquid cash and have a property in their name.
How to apply for a mortgage loan?
To apply for a mortgage loan through any lending institution, visit their official website or their nearest branch. For an online application, open the lending institution’s website, and you can choose the product you wish to apply for. There you will find an “Apply Now” option on their page. Depending on the process, you must fill out an online application form and submit the details.
You can go to the branch, request an application, and submit it with the required documents. Below is the application process for a mortgage loan:
- Document collection to process the loan
- Credit appraisal by the lending institution
- Verification of personal or business information given
- Sanction letter delivered by post as well as email post approval
- Documents collection
- Evaluation of your property
- Post successful verification, disbursement cheque delivered
The documentation for mortgage loans in India is also very simple. The applicant should be an Indian citizen and have a regular income source. A CIBIL score of at least 750 is necessary for quick mortgage loan approval.
Conclusion
A mortgage loan is a loan against the property you own. The property can be your house, shop, or land. Mortgage loans in India are very common and simple. Your property is your guarantee, and it stays with the lending institution until you repay fully. It is offered by various lending institutions.
