An ideal solution for all financial problems
When individuals need money to meet an urgent need, the first thing to consider is a loan. However, many find it difficult to choose the loan that is best for them. While some concerns are warranted, financial experts say that a mortgage loan, also known as a home loan, is one of the best secured loans available. It also carries comparatively lower interest rates compared to the other options. Most importantly, it allows the borrower to use the value locked in their property while continuing to use it during the repayment period.
What is a Mortgage Loan?
A Mortgage loan is one where a borrower secures funds by mortgaging property. With a mortgage loan, the borrower is free to use the money as they see fit. There is no limit to how the sanctioned money is used. A borrower can use the fund for home-related expenses or for personal or business needs.
Benefits of Mortgage Loans
When a borrower has a healthy credit score and is on time with EMI payments, there are few lucrative options other than LAP. Here’s why:
Sanctions can be imposed by anyone
A real estate loan is not only permitted for employees, but also for the self-employed and tradespeople. For a mortgage loan, the current property value, along with the borrower’s income, determines eligibility for a mortgage loan. In addition, creditworthiness and age also determine the loan amount and the repayment terms. To be eligible for a real estate loan, the following requirements are required:
â Minimum age: 18 years
â Maximum age: 70 years (when the loan falls due)
â Type of resident: Resident of India
â Loan Period: Up to 18 Years
Helps get a sizeable sanction
Based on a lender’s guidelines, a borrower is eligible to obtain a mortgage loan of up to 70-75% of the current property. In addition, borrowers can also benefit from the typical long terms (up to 18 years) that are allowed on a loan against real estate.
Guaranteed lower mortgage loan rates
A mortgage loan usually has a lower interest rate than other forms of unsecured borrowing. Opting for fixed monthly repayments means that a borrower can use them accurately in planning and forecasting so that they can structure the financial goals with greater confidence.
Does not impose any restrictions on end use
A mortgage loan helps to manage all of your major expenses with ease. A borrower can use the mortgage-sanctioned fund for the following purposes: wedding, debt consolidation, studying abroad, and buying a home. Thanks to the substantial sanction that comes with a mortgage loan, it can seamlessly cover all of these costs.
Includes simple documentation and quick payouts
Compared to other unsecured loans, a mortgage loan involves a less complicated documentation process and quick payout. In addition to completing the application form and providing proof of valid proof of identity, income and address, a loan applicant must submit ownership documents with an appraisal. It should be noted that all applicants must ensure that all information in the documents is correct and complete. Otherwise, it may result in a rejection.
Allows balance transfer
The balance transfer facility helps transfer a loan from one account or lender to another, eliminating a borrower’s heavy debt. Based on the borrower’s credibility and financial profile, they can secure the most suitable loan available.
A loan-to-property balance transfer facility enables a borrower to transfer the principal amount outstanding on an existing home loan to another at a lower amount Interest rate on mortgage loan. It helps to significantly reduce EMIs and save more on interest costs, thereby lowering the overall debt burden. In addition, you also have the option of negotiating better loan terms with a more trusted lender.
How to apply for a mortgage loan
In order to apply to a lender online, a borrower must follow a few steps:
â Visit the lender’s official website and go to the Loans Against Property section
â Before applying, the borrower must check his eligibility for the mortgage loan
â In addition to checking eligibility, they also need to check other details including interest rate and other fees
â If they agree to the mortgage loan application, they can fill out the application form and upload all the required documents
Once the verification is complete, the lender is expected to sanction the loan amount in about a week or less.
The Three Most Important Tips For Getting The Best Mortgage Loan
Applying for a home loan can sometimes be a confusing and frustrating experience for potential borrowers. It doesn’t have to be like that, however. By following the mortgage tips listed below, an applicant can simplify the process.
âª Maintaining creditworthiness: The CIBIL score affects the types of loans a borrower is eligible for, how much money can be sanctioned, and mortgage loan interest rates. Hence, it is wise to keep an eye on your own creditworthiness and ensure that it is ideally above 750+.
âª Understand the options for mortgage loan: By knowing all of the mortgage loan options prior to applying, a borrower can ensure that the selected lender is offering the best type of loan. The different types of mortgage loan typically include the following:
o home loans
o Residential / commercial property loans
o Rental discount
âª Set a budget. Use a mortgage calculator to determine how much it is convenient to borrow and repay and stick to it.
The last word
Buying a property is a big purchase and a big decision. You have to take your time and consider all options. It is important to read up on the current market, financial requirements, and the overall mortgage loan process so that a borrower knows what to expect.
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Posted on Thursday November 18, 2021 1:56 PM IST