Mortgage Loan in India - Compare Best Bank Offers

The different ways to apply for a mortgage loan are mentioned below: 

Online

1. You can apply for a mortgage loan through the bank's official website or by visiting the nearest branch.

1. For an online application, go to the lender's website and choose the product you wish to apply for.
2. If they entertain online applications, you will find an 'Apply Now' option on the page.
3. Depending on the process, you may have to fill an online application form and submit the details.

Offline

You can also go to the nearest branch, request for an application, and submit it along with the required documents.

Here's a look into the application process for a mortgage loan:

1. Document collection to process the loan
2. Credit appraisal by the bank
3. Verification of personal/business information provided
4. Sanction letter delivered via post and email post approval
5. Request for disbursal
6. Property documents collection
7. Evaluation of your property and its documents
8. Post successful verification, disbursement cheque delivered

Types of Mortgage Loans 

The types of mortgage loans are: 

1. Simple Mortgage: Understanding the essence of the term "mortgage" involves exploring various types, with the simple mortgage being fundamental. In essence, a simple mortgage is an agreement that grants the lender the right to liquidate the collateral property in case of borrower default, without transferring the property title to the lender. 
2. Sub Mortgage: The mortgage meaning of sub-mortgage caters to borrowers with compromised credit histories. Lenders may provide loans at elevated mortgage interest rates to mitigate the risk of payment defaults. Borrowers need to understand these heightened rates and their implications. 
3. English Mortgage: Expanding the scope of mortgage meaning, the English mortgage allows the lender to take possession of the collateral if the borrower defaults within the agreed tenure. The intricacies, such as mortgage interest rates, may vary based on the agreement. 
4. Usufructuary Mortgage: Digging deeper into the meaning of mortgage, the usufructuary mortgage involves handing over the property to the lender, not for outright ownership, but to earn profits from it. In this scenario, the lender has temporary rights to the property to generate income.

Eligibility for Mortgage Loan

To get approved for a mortgage loan, you need to fulfil the eligibility criteria set by banks and financial institutions. While the criteria may vary from bank to bank, listed below are general factors that determine your eligibility:

1. Gross annual/monthly income
2. Minimum age requirement of 21 years
3. Valuation of your property
4. Income proof documentation
5. Existing liabilities
6. Number of dependants

Whether you're salaried or self-employed, you're eligible for a mortgage loan.

Documents Required for a Mortgage Loan

The documentation required for the loan application varies based on your employment status i.e., self-employed or salaried.

If you're a salaried individual, listed below are some documents you may be asked to submit:

1. Duly filled loan application form
2. Passport-size photographs
3. Identity proof (PAN card, Aaadhaar card, passport, driving licence, voter ID card, etc.)
4. Address proof (electricity bill, ration card, Aaadhaar card, driving licence, rental agreement)
5. Latest salary slips
6. Form 16 issued by employer
7. Latest bank statements
8. Processing fee cheque

If you're a self-employed professional/individual, you may be required to submit the following documents:

1. Duly filled loan application form
2. Passport-size photograph

1. Identity proof (PAN card, Aaadhar card, passport, driving licence, voter ID card, etc.)

1. Business proof
2. Financial statements for the last 3 years
3. Latest income tax return certificates (last 3 years)
4. Profit and loss statement (P&L)
5. Latest bank statements
6. Cheque for processing fee

How does a Mortgage Loan Work? 

1. A mortgage loan is a contractual agreement in which a borrower offers property as security to a lender in exchange for a loan.
2. The core concept of a mortgage lies in the property serving as collateral.
3. Borrowers are then required to repay the loan, usually in monthly instalments, covering both principal and mortgage interest rates.
4. An important characteristic of how mortgage loans operate is their responsiveness to market conditions and the prevailing interest rate environment.
5. In the event of a decline in market mortgage rates, borrowers may consider refinancing, essentially replacing their existing loan with a new one, in the hope of securing more favourable terms.
6. Reverse mortgages represent another dimension of mortgage loans. This type of mortgage provides senior citizens with a unique avenue to generate income for meeting living expenses.
7. Through reverse mortgages, seniors can tap into their home equity, converting it into regular income streams to ensure financial security in their retirement years. Thus, a mortgage loan transcends mere borrowing; it is a multifaceted financing option.

Things to Consider Before Applying for a Mortgage Loan

Before you decide to opt for a mortgage loan, there are certain factors you need to evaluate. Let's find out what they are in the section below:

1. Interest rate: Depending on the lender, you may get interest rates anywhere between 11% to 15%. You can choose to get a floating rate loan or a fixed rate loan.
2. Fees and charges: Processing fees, documentation charges, application fees, property inspection fees, loan overdue fees, late payment penalties, loan conversion fees- these are just some of the charges you need to take into account. These fees can increase the cost of your loan.
3. Tenure: The repayment period offered by lenders can go up to 15 years. However, if you're choosing an overdraft facility for your mortgage loan, the tenure may be much lower.
4. Repayment schedule: This also differs from bank to bank. While most banks offer an EMI option for the mortgage loan, there are other repayment options available too. It's important to clarify this with your lender before getting the loan.
5. Eligibility criteria: The criterion for the loan changes on the type of employment, your residency status, your income, your age, among other factors. Always check the criteria with your lender before applying for the loan.

1. Loan amount: For a mortgage loan, you're required to submit your residential or commercial property as collateral. The sanctioned amount depends on the metric value of your property. 

Most banks and financial institutions have a 40% to 60% margin. Other factors considered are the property’s condition and age. 

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