Mortgage loans or loans against property is a secured loan available for self-employed and salaried professionals against the mortgage of property. You can avail a mortgage loan up to 60-70% LTV for up to 15 years. Presently, the rate of interest for a mortgage starts at 8.70% p.a along with a processing fee up to 1% of the loan amount.
You can take a mortgage loan if you require funds for the following purposes:
- Fund your child’s education abroad
- For funding any medical emergency
- Wedding of your child
- Funding the dream vacation
- Business expansion
Want to take a mortgage loan? Here are the eligibility criteria that you must know!
- Age: To get a mortgage loan, you must fall in the age bracket of 21 years to 65 years. However, there are some banks which provide credit to individuals between 18 years to 70 years of age.
- Monthly Income: You should have a monthly income of Rs. 40,000 if you are a salaried individual and in case of self-employed professionals, the bank prefers a minimum income of Rs. 3 Lakh p.a.
- Credit Score: A credit score of 650 or above is considered a good score to get a mortgage loan. However, if you have don’t have a good credit score, you can get a loan at higher interest rates and charges.
- Loan to value ratio: The LTV of mortgage loans depends on the type of property.
- For industrial property – 50 – 55%
- For residential property – 60 – 75%
- For commercial property – 60 – 70%
Procedure to get the mortgage loans: You can select the best banks for a mortgage loan on parameters such as interest rate charged by the banks, processing fees, other charges such as prepayment or foreclosure fees and the process of getting a loan. It will be a wise decision if you check the loan eligibility to get the loans at the best interest rate, Once you have shortlisted the bank, you can get a loan from a bank, non-banking institution or through an online marketplace.
A step-by-step guide to getting a mortgage loan:
- You can fill the application form online or by visiting the bank branch. If you are getting a loan through the offline mode,the bank representative will ask for fill personal, professional and income details in the application form to check your loan eligibility.
- Based on your loan eligibility, it will provide the loan details such as the loan amount, tenure, interest rate and other charges. The bank will also provide information on the documents required and the process of sanctioning of the loan.
- Bank will then arrange the meeting for submitting of essential documents related to identity proof and address proof along with the income documents. It may also send the representative to collect the documents.
- In the meantime, the bank will evaluate the property and then determine the loan eligibility based on the value of the property.
- The bank will initiate the process of disbursement after the verification of documents and property evaluation.
Benefits of a mortgage loan:
- The rate of interest on a mortgage loan is generally lower than the personal loan and can go up to 15%.
- There are no prepayment charges if you want to prepay the loan before the determined tenure of a mortgage loan.
- The mortgage loan is available for long tenures up to 15 years.
- As the mortgage loans are secured loans, you can get the credits easily.
Taking a mortgage loan is a cumbersome process of the property evaluation and verification of documents. Having an income proof is an essential eligibility criterion to get a loan as the credit is provided against the mortgaged property.