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A mortgage loan is a secured loan where you pledge an immovable asset, like residential, commercial, or industrial property, as collateral to borrow money. It’s a versatile financial tool often used for large expenses, such as starting a business, managing medical emergencies, funding education, or consolidating debt. The property remains yours, and you can continue to use it even while it is pledged.
Benefits of a Mortgage Loan
High Loan Amount: You can borrow a significant percentage (50%–75%) of the property’s market value.
Low Interest Rates: Compared to unsecured loans, mortgage loans offer lower interest rates because the loan is backed by collateral.
Flexible Tenure: Repayment periods are long, usually ranging from 5 to 20 years, which makes monthly EMIs more manageable.
Multipurpose Usage: There are no restrictions on how you can use the funds.
Ownership Retention: You continue to own and use the property during the loan tenure.
Boosts Credit Score: Timely repayment of a mortgage loan can help improve your credit score.
Features of a Mortgage Loan
Secured Loan: Your property acts as security, reducing the lender’s risk.
Loan-to-Value Ratio (LTV): Typically, lenders offer 50%–75% of the market value of the pledged property.
Wide Range of Properties: Both residential and commercial properties are eligible for mortgages.
Customizable Interest Rates: You can choose between fixed or floating interest rate options.
Prepayment Options: Most lenders allow part-prepayment or foreclosure with minimal charges.
Disbursement Based on Valuation: The loan amount depends on the property’s current market valuation and your repayment ability.
Eligibility Criteria for a Mortgage Loan
To apply for a mortgage loan, you’ll need to meet the following general criteria:
Age: Typically between 21 and 65 years.
Income: A stable income source, whether salaried or self-employed.
Property Ownership: You must own the property being mortgaged, and it should be free from disputes or legal issues.
Credit Score: A good credit score (usually 700+), although some lenders may approve loans with lower scores.
Repayment Capacity: A solid repayment history or sufficient monthly income to handle EMIs.
Property Type: The property should meet the lender’s criteria (e.g., location, construction quality, etc.).
Documents Required for a Mortgage Loan
Here’s a detailed list of the documents you’ll need:
1. Personal Identification Proof (Any One)
Aadhaar Card
PAN Card
Passport
Voter ID
Driving License
2. Address Proof (Any One)
Utility Bills (Electricity, Water, Gas)
Passport
Rental Agreement
3. Income Proof
For Salaried Individuals:
Recent salary slips (3–6 months).
Bank statements for the last 6 months.
Form 16 or Income Tax Returns (ITR).
For Self-Employed Individuals:
Business registration certificate or GST registration.
Profit & Loss statements and balance sheets.
ITR for the past 2–3 years.
4. Property Documents
Title deed or sale deed of the property.
Encumbrance certificate (to prove the property is free from legal disputes).
Approved building plan.
Latest property tax receipts.
5. Other Documents
Loan application form.
Passport-sized photographs.
Any existing loan documents (if applicable).
Why Choose a Mortgage Loan?
A mortgage loan is a reliable option when you need a large amount of money without selling your property. It offers flexibility, affordable interest rates, and extended repayment tenures, making it suitable for various financial needs. Additionally, by using your property as collateral, you gain access to funding while retaining ownership and use of the asset.
RATE OF INTEREST AND TENURE: 3% AN D 1 TO 20 YEARS