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Mortgage Loan Meaning, Process, Types and Interest Rate

Meaning A mortgage loan is a type of secured finance. Under the mortgage loan, you can avail a large loan amount when you keep an immovable asset as collateral with the lender.

The security could be anything from a residential to commercial property or other ones like heavy machinery and even industrial property.

Since borrowers keep collateral to avail such a loan, the applicable rate of interest on it is much lower. Hence, you can avail a large loan amount to meet your different needs and pay smaller EMIs.

Types of Mortgage Loan Simple mortgage -

Under this type of mortgage loan, you are allowed to

mortgage the immovable property to get the loan personally simply.

Usufructuary mortgage -

This type of mortgage loan permits the transfer of the

property’s possession to the lender.

English mortgage -

This type of mortgage loan leads to the establishment of

personal liability on the borrower.

Types of Mortgage Loan Mortgage by conditional sale -

In this type of mortgage loan, a mortgagor

sells the property with conditions that it will become effective if there is the default on repayment.

Mortgage by deposit of the title deed -

If you want to know how to get

a mortgage loan under this type, then the applicant deposits the mortgaged property title deed. It is with the loan provider and is against the loan to avail.

Anomalous mortgage -

You have so far come to know how to get a mortgage

loan under various types. Under the anomalous mortgage, any mortgage that does not fall under the discussed ones is the one that lies within it.

Aspects Determine Mortgage Loan Interest Rates LTV Ratio - Loan to Value (LTV) refers to the percentage of the value of the property that you can get while keeping the asset as the collateral. A large loan amount comes with a higher interest rate. It is as the credit risk of the lender is higher.

Your Cibil Score - The credit score does have an impact on mortgage loan interest rates. It is the mirror of your creditworthiness. It showcases if you have paid earlier and ongoing EMIs on time or not.

The Location Of The Property - The location of the new home if you are availing a mortgage loan may hamper the rate of interest. A home located with better connectivity and infrastructure will have a greater resale value.

Your Job Profile - If you have been well employed and have a consistent source of income, then lenders may consider you as a low-risk loan applicant.

You Must Consider a Few Factors Beforehand But before you apply for it, you must consider a few factors beforehand. It will help you approach and manage the loan better. Read on and know more! ● ● ● ● ● ●

Know the Loan Amount That You Will Get Be Aware of the Repayments and the EMIs That You Will Pay Check out Property Loan Interest Rates Know if You Can Make Prepayments and Manage Fees for IT Know if You Can Avail any Tax Benefits or Not Compare Property Loan Interest Rates of Lenders