Brief Introduction About Mortgage Loan

KNOW EVERYTHING ABOUT MORTGAGE LOAN AND ITS INTEREST RATES

What is Mortgage Loan?

In the present economic scenario, loans have become one of the popular financing sources that can sufficiently fulfil big-ticket expenditures. Under such circumstances, individuals can look for secured advances like mortgage loans as a more feasible option for high-value funding. These are financing options availed against the mortgage of a residential or commercial property and come with an extended repayment tenor.

Features of Mortgage Advances Mortgage loan are primarily available in two types – home loans and loans against property. While home loans are designed to fund a residential property purchase, property loans or loan against property come with unrestricted end-use. Some typical features of these advances include – -

Simple eligibility requirements

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High-value financing

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Simple documentation

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Flexible tenor options

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Fast processing of loan applications

Interest Rates on Mortgage Loans Usually, interest rates of mortgage loan are lower compared to the other traditional unsecured funding options. It is because the risk of lending is lower with these advances due to the presence of a mortgage, allowing lenders to provide competitive rates.

However, the property loan interest rate can be different from that of home loans even although they both are mortgage advances. Here, it is essential to note that such a difference is not as remarkable as for unsecured advances.

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Working Process of Mortgage Loans A mortgage advance like a loan against property is considered one of the most convenient ways to raise size-able funds of up to Rs.3.5 crore. However, when applying for it, borrowers must analyse their repayment capacity beforehand.

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A strong financial profile can prove beneficial in obtaining the loan at affordable terms.

One’s credit profile is measured by an excellent credit score, timely payments, and responsible use of previous debt tools, among other parameters.

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Once availed, borrowers can repay the loan liability in EMIs extending over a tenor of up to 20 years.