Loan Against Property is a secured loan. In banking terms, this is called a mortgage loan. It involves placing residential or commercial properties like houses, flats or shops as collateral with banks or NBFCs. A loan is a good option by mortgaging the property.
When is a mortgage loan taken out?
Mortgage loans are usually taken for financial solvency in a new venture. For example, this loan can be taken in case of property purchase. Its biggest advantage is that the property against which the loan is taken does not have to be sold. Once the loan is repaid, ownership is restored. These loans can be taken for various purposes such as business development, construction or purchase of house, travel abroad for higher education etc.
Interest rate on mortgage loan:
Interest rates on mortgages typically range from 12% to 15%. However, it often depends on other indicators such as down-payment, how many years the mortgage is being kept. However, mortgage loan interest rates are generally lower than any personal loan. That is why most of the customers prefer to take mortgage loan if possible. After home loans, the lowest interest rates are found in mortgage loans.
What banks check before giving a mortgage loan:
In any loan processing, banks or lending institutions check many things. Documents that are usually checked before giving a mortgage loan
Monthly and Annual Income
Taxes paid in last 3 years and Tax Identification Number (TIN Number)
occupation
work experience
Current working organization
Value of the mortgaged property
Current or outstanding loans (if any)
Besides, the age and income of the loan applicant (borrower) are also checked by the bank. Basically every bank approves the loan only after verifying these issues. It may vary slightly from bank to bank. BProperty has exclusive agreements with various banks. You can see their details from BProperty’s home loan page.
This was today’s article about mortgage loans. Here are some commonly asked questions. If you want to know anything beyond this, you can ask in the comments section.
