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A mortgage loan is a form of raising finance for your personal or business purpose. The specialty of mortgage loan is the security that you need to provide in order to avail the loan. You can take advantage of the property you own to raise finance for the property you are planning to buy or to meet your business requirement. There are many situations when you need to raise finance from an outside source. Banks and financial institutions are offering you a variety of financing options to choose from. With competitive interest rates and flexible repayment tenure, you can avail the loan for personal as well as business purpose. You can avail mortgage loan for expansion of your business, acquisition of machinery or plant, project finance, purchase of new property, market expansion etc.
Since it is a secured loan, it will be necessary to pledge the property against this loan. You can raise money by mortgaging your idle property. This 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 raise a higher loan amount. The property can be a land, building, apartment, commercial premises, factory, shop, farm house, hotel, guest house, nursing home or industrial property. Mortgage loan can be customized as per your requirements and comes with various benefits such as lower rate of interest, higher loan amount and longer tenure. Moreover, business entities and self-employed professionals can claim tax benefits on the same.
Mortgage loan is available for business entities, traders, service providers, manufacturers and self-employed professionals. For mortgage loan, the applicant has to provide proof of income, proof of identity and proof of address. Apart from this, it is important to submit the property documents and also ensure that the property is insured against perils like fire. In case of jointly holding property, the co-owners will become co-applicants for the loan. The value and age of the property are the main criteria for loan approval. On the basis of the same and on the basis of the market value of the property, the loan is sanctioned. Once the application is processed, the bank or financial institution will appoint a valuer who will determine the market value of the property and based on that the loan amount will be sanctioned. Usually 60% of the property value is sanctioned as the loan amount. This loan has a longer tenure due to the higher value and 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 case of secured loans, it is important to pay the installments on time. Since the property is mortgaged with the bank, in case of regular default in payment of installments, the bank can transfer the ownership. The bank will also serve a notice for payment and if he defaults again, the bank will have to auction the property and you may lose the ownership. Therefore, it is of utmost importance to ensure that the repayment is done on time. It also provides an option to prepay the loan before the end of the repayment schedule. This option will save you interest payments and also provide you with a positive credit score. Individuals with a satisfactory or positive credit score can easily process the loan.
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