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Mortgage Loan Interest Rates
What is a Mortgage Loan?
A mortgage loan is a loan that is secured by property or real estate. The borrower offers his /her property as collateral to the bank for the loan.. Depending on the lender, it can be used for a variety of other purposes as well – a mortgage loan could be your answer to funding your child's higher education or wedding or invest in your business. A mortgage loan is generally a multi-purpose loan that can be used both for your personal or business needs.
Features of a mortgage loan
The loan can be taken against the mortgage of a residential or commercial property, or plot. The property's market value is assessed before sanctioning the loan, and if the title deeds are found to be clear and free of any legal encumbrances, the loan is given as a certain percentage of the property's current market value. Depending on the lender, the loan amount could range anywhere from 40 per cent to 60 per cent of the assessed market value.
The pre-requisite to avail a loan against property is that there should be no legal encumbrances to the property and the title should be in your name.
What are Mortgage Loan Interest Rates?
Generally, a mortgage loan attracts lower interest rates than other loans, since the bank holds your property as security. Also, it translates to a higher loan amount disbursal depending on the property's market value. The interest rate on a loan against property could range anywhere from 12% to 20% per annum or more - depending on your individual credit history and a score of other factors.
What are the documents required?
Following are the general documents required, although you might be requested for additional documents as per the discretion of the lender.
• Filled-in Loan Application form with passport size photographs
• Copy of lease deed
• Income proof of the applicant and guarantor (if applicable – guarantor requirements vary from lender to lender)
• Income Tax Assessment Order / IT Returns
• Title deeds of the property / EC, latest tax paid receipt / Legal Scrutiny Report
• Annual Financial Statements for the past 2 years - applicable for the self employed
You can apply for a mortgage loan in any of the leading private / public sector banks and NBFCs in India.