A mortgage loan is a form of raising financing for your personal or business purpose. The particularity of a mortgage loan is the collateral that you need to provide in order to benefit from the loan. You can simply make use of the property you own in order to increase financing for a property you plan to purchase or to meet your business requirements. There are different circumstances when you need to raise financing from an external source. Banks and financial institutions offer a variety of financing options for you to choose from. With competitive interest rates and flexible repayment terms, you can benefit from a loan for both personal and business purposes. You can take advantage of a mortgage loan to expand your business, purchase machinery or plants, finance projects, buy a new property, or expand your market.
Since it is a secured loan, it will be necessary to mortgage a property against this loan. You can mortgage your idle property and collect financing on it. It can be any property owned by you and the loan amount will be secured against the mortgaged property, which means you will be able to collect a higher loan amount. The property can be land, building, apartment, commercial space, factory, shop, farm house, hotel, guest house, nursing home or industrial property. A mortgage loan can be customized as per your requirements and comes with various benefits like lower interest rate, higher loan amount and longer tenure. Moreover, business entities and self-employed professionals can claim tax benefits on the same.
A mortgage loan is available to business entities, merchants, service providers, manufacturers and self-employed professionals. To get a mortgage loan, the applicant needs to provide proof of income, proof of identity, and proof of address. In addition, it is important to submit the documents for the property and also make sure that the property is insured against risks such as fire. In the case of joint ownership, the co-owners will become the co-applicants for the loan. The value and age of the property are the main criteria for loan approval. Based on the same market value of the property, the loan is sanctioned. Once the application is processed, the bank or financial institution will appoint an appraiser who will determine the market value of the property and based on that, the loan amount will be sanctioned. Usually 60% of the value of the property is sanctioned as a loan amount. The term of this loan is longer due to the higher value and this enables the borrower to repay it in regular installments over time. It comes with a flexible tenure of up to 180 months and a loan amount of up to Rs 15 crore.
In the case of a secured loan, it is important to pay the installments on time. Since the property is mortgaged to the bank, the bank may transfer the property in case of regular default in the payment of installments. The bank will also provide a notice of payment, and if you default again, the bank will have to auction off the property and you may lose ownership. Thus, it is very important to make sure that the payment is made on time. It also provides the option to prepay the loan before the end of the repayment schedule. This option will save you paying interest and will also provide you with a positive credit score. Individuals with satisfactory or positive credit score can easily process their loans.
Source by Neha Verma