Mortgage Loans have become an integral part of the Indian financial landscape, enabling millions of people to fulfil their various financial needs. These loans are obtained by real estate buyers to raise funds for buying property or existing property owners for some other financial expenses by mortgaging their owned property as collateral for security. Mortgage Loans come in various forms, tailored to meet the diverse needs and financial situations of borrowers. In this article, we will delve into the different types of mortgage loans available in India, each offering unique features and benefits.
Types of Mortgage Loan
1. Loan Against Property
Also known
as Property Mortgage
Loan, Loan Against Property is a type of secured loan in which the
borrower pledges their property as collateral in exchange for a loan.
This type of loan is offered for commercial, residential, and rental
properties. The amount of the loan is typically based on the value of
the property being used as collateral and can range from a few lakhs
to several crores. The loan amount can be used for large expenses such
as home renovations, medical expenses, or debt consolidation. The interest
rates for Loan Against Property are generally lower than
unsecured loans, as the lender has the security of the property in
case of default. However, it is important to carefully consider the
risks involved before taking out a Loan Against Property, as failure
to repay the loan can result in the loss of the pledged property.
2. Commercial Purchase Loan
Another
popular type of mortgage loan is the Commercial Purchase Loan. This
type of loan is taken by businessmen and entrepreneurs to finance
the purchase of commercial properties such as office buildings,
retail spaces, or industrial warehouses. Similar to a Loan Against Property, the
property being purchased is used as collateral for the loan. The
amount of the loan is typically based on the value of the property and
the borrower's ability to repay the loan. Interest rates for
commercial purchase loans can vary depending on the lender and the
borrower's creditworthiness. It is important to carefully consider the
risks involved before taking out a commercial purchase loan, as
failure to repay the loan can result in the loss of the purchased property.
3. Housing Loan
As the name
suggests, a Housing Loan is a type of loan that is used to finance
the purchase of a residential property, such as a house or a
condominium. The property being purchased is used as collateral for
the loan, and the amount of the loan is typically based on the value
of the property and the borrower's ability to repay the loan. The
amount secured from this loan can be used to buy flats, bungalows,
and independent houses. It can also be used to build additional
floors on your house and for renovation purposes.
Conclusion
In conclusion, there are several types of mortgage loans available in India that cater to different needs and requirements. Conduct thorough research and compare various lenders based on their features, interest rates and other loan terms to find the option that’s right for you.
Frequently Asked Questions About Mortgage Loan
1. What is the interest rate on a mortgage
loan?
Usually, the interest rates on a mortgage loan
start from 9% per annum. However, it may vary significantly
depending on factors such as lender, loan type, borrower’s credit
score, etc.
2. Are home loans and Mortgage Loans
the same?
No, they are not. A home loan is given to
people for buying or constructing a house. On the other hand, a
Mortgage Loan, also known as a Loan Against Property (LAP), can be
used to fund any personal or business needs.
3. Which
documents are required for a Mortgage Loan?
The
list of required documents may vary from lender to lender since each
lender has its own document requirement for Mortgage Loans. But here
are some primary documents that you will need to submit:
- KYC Documents: PAN Card & Aadhaar Card
- Address Proof: Electricity Bill, Passport, Rent Agreement
- Income Documents: Three-month salary slips
- Financial Documents: Bank account statement for the last 12 months
- Property Documents: Important papers related to the property you want to mortgage
