Mortgage loans are loans backed by collateral or security. In India, the term mortgage loan is synonymous with loans against property or property loans. For loans against property or property loans, the pledged collateral is either a residential or commercial property or land. For these loans, lenders submit a property they own as security, giving the lender the right to sell the pledged collateral and recover losses in case of a loan default. Since these loans are backed by security, lenders treat them as low-risk loans and therefore, offer many features that make loans against property or mortgage loan a highly beneficial loan type for borrowers.

Mortgage Loans: Benefits 

Here are some of the benefits of a mortgage loan

1. Loans against property are backed by collateral or security. The presence of a high-value collateral greatly reduces the risk for the lender. Consequently, lenders sanction these loans at low loan against property interest rates which not only reduces the cost of borrowing money but also makes loan repayment easy through affordable EMIs. 

2. Mortgage loans come with a long repayment tenor. Borrowers have the flexibility to choose their loan repayment period, which can easily stretch up to 20 years. Such a long repayment period helps ease the burden of loan repayment, allowing borrowers to repay the loan comfortably through economical EMIs. 

3. The mortgage loan funds come with no end-use restrictions. Borrowers can use the loan funds however they like. From paying a child’s tuition fee to using the money to start a business or buy a property, mortgage loan users can do so many different things with the loan funds without having to answer their lender. 

4. Lastly, loans against property also give borrowers access to substantial funds. One can borrow up to 75% of their property’s net market value. Thus, the loan amount is always ample to help the borrower fulfil a variety of aims and objectives. 

Loan Against Property: Process 

The process of applying for a loan against property is fairly easy. One of the first things you do, when you want to avail yourself of a property loan or a loan against property, is to find a lender you can trust and rely on and who is willing to offer you a mortgage loan on the most desirable loan terms and conditions. Doing this will require you to research the market and carefully study the options available to you. Negotiating hard will also be required. 

Once you are clear on the lender, apply for a loan by filling out the loan application form and providing all the required information. Once your loan application reaches your lender, they will take a call on whether to extend you a loan. They will assess your age, income, debt-to-income ratio, LTV ratio you have opted for, etc. while deciding on your loan application. If they do decide to extend you a mortgage loan, you will be asked to submit various documents, such as income, property, identity and address proof documents.

Once you have submitted these documents, your lender will begin the document and property verification process. This process will easily take a few weeks and if you clear it, your lender will sanction you a loan and let the terms and conditions they are willing to offer you become known through the mortgage loan sanction letter. You can negotiate for better loan terms and conditions if you are not happy. You will finally receive the mortgage loan offer letter. Sign it and you will have the loan funds disbursed into your loan account thereafter.

Mortgage Loan: Qualifying Requirements 

If you plan to avail yourself of a mortgage loan, there are some qualifying criteria that all lenders would require you to fulfil. 

1. The loan applicant must be a residing citizen of India. 
2. They must at least be between 23 and 65 years of age. 
3. They must have a CIBIL score above 750. 
4. The property they plan to pledge as collateral must be in their name and they must be legally permitted to pledge it as collateral. 

The qualifying criteria for mortgage loans vary from lender to lender and therefore, it’s best that you check with your lender whether or not you qualify for a mortgage loan before beginning the loan application process.