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Know What is Mortgage Loan and How to Apply for It.

mortgage loanmortgage loan
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When someone needs to borrow a loan from a financial institution or any other lender, he/she needs to undergo an agreement in which they contend the new owner of the property with underlying equity, which may include house, land, commercial property, etc., will be the same financial institution or the lender if the person fails in reimbursing the loan amount. This practice in simple terms knows as a mortgage loan.
 
Now the question prevails, why does one try for these types of loans? There cannot be one exact answer to this question. There may be plenty of reasons why a person is endeavoring a loan against such property.
 

To sum up a few:

  • A hefty amount of money may need for the treatment of any critical health condition surfacing during an emergency.
  • Lump-sum funding is also needed for weddings or any other personal expenditures of high value.
  • Sometimes extra cash may require for the buy of another property. Taking a loan can be useful in such a scenario.
  • Few even consider taking a loan against their properties for their children’s higher education.
  • Overseas travel is another common reason why one can seek financing of high quantum.
After probable reasons being discussed, let us now dig deep into the various formalities, paperwork, and how one can apply for such loans.mortgage loan emi calculator
 

Who Can Apply for a Mortgage Loan?

  1. Any individual indulged in a business or a service that has completed a tenure of the lender-specified number of years can apply for this loan.
  2. The individual must meet the smallest and largest age eligibility at the time of application, which is usually 21 years.
  3. The property should register in the person’s name.
  4. There should not be any dispute on the property that proposes a mortgage.
  5. If the proposed property has more than one owner then every party involved must provide written consent.
Individuals must fulfill the list of required documents as well.
 

List of Documents Needed:

  1. Valid ID proof: Aadhaar card, PAN card, driving license, voter’s identity card, etc.
  2. Residential address proof: Aadhaar card, driving license, voter’s identity card, electricity bill, telephone bill, rent agreement, water bill, gas passbook, bank’s passbook, etc.
  3. Proof of income for a salaried individual: Last 3 months’ salary slip along with company’s offer letter and bank statement of last 1 year, ITR filed for the last 1 year.
  4. Proof of income for a business owner: Trade license, ITR filed for the last 3 years, statement of the bank account for at least 6 months.
  5. The income for a self-employed individual: Self-employed individuals like doctors, chartered accountants, engineers, etc. need to provide an audited financial statement by a CA or any such other entity.
  6. Property documents: Possession of original property documents to be mortgaged.
mortgage loan uses
mortgage loan uses

The Process to Apply for a Mortgage Loan:

  • (i) Fill the application form: An application form provided by the preferred lending institution should be filled thoroughly.
  • (ii) Bank account details: Provide bank account details in which you wish your loan amount to disburse.
  • (iii) Waiting period: Depending on your lender, it may take 3 to 7 days to complete property verification, background checks, etc.
Finally, after all the due processes, the required amount will be disbursed to the provided bank account.
 
Taking a loan against idle property is the best way to raise lump sum funding in a time of need. Many lenders provide loans at affordable rates as well. Interest rates can vary anywhere between 8% and 22% depending on the lender.
 
Now, the common question one may look out for is: What are the key points to take into consideration before taking a loan against a property? One should always be keen enough to enquire about every bit and process before taking any type of loan.
 

Few Points to Keep in Mind before Applying for Mortgage Financing:

  • Read loan-related documents very carefully.
  • Compare the EMIs of various lenders.
  • Never go for a loan amount that you cannot pay.
  • Always try to choose a minimum available duration. It can help you save a lot of money in the long term.
  • If enough financing is available, try to foreclose your loan.
  • Enquire about processing charges and other charges, if applicable.
  • Ask if the lender provides any sort of insurance coverage on the loan offer.
  • Must not forget to ask about foreclosure charges and rates.

    mortgage loan calculator
    mortgage loan calculator
If suddenly there arises a need for urgent cash in a lump sum, mortgage loans could be the best option to go for. There are many lenders and financial institutions available in the market that are more than happy to provide you loan against your property’s underlying equity. An idle property that does not depreciate over time could be best used for such loans and can ease your finances.

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