A mortgage loan is a secured loan where the lender provides you the funds against an asset as collateral. This kind of financing helps the borrower the benefit of availing a higher loan amount and a longer repayment tenor.
A mortgage is generally sanctioned against an immovable asset like a house or a commercial property. The lender retains the asset as collateral until the borrower pays back the total loan amount.
A home loan or a commercial property loan can be availed only to purchase a home or a commercial space. Whereas, a loan against property has no such restrictions and can be utilized as per the borrower’s requirements, which can be for higher education, a wedding, a home renovation, etc.
Mortgage loans are secured loans, where the borrower pledges a property with the lender to avail of the loan. The collateral pledged is withheld by the lender till full repayment of the loan is done. The loan is usually paid back through equated monthly installments or EMIs.
The mortgage loan repayment plan is calculated on the basis of amortization. The EMI value depends upon the mortgage loan interest rates and the principal loan amount.
When the EMIs begin, the interest forms a larger part of your EMIs as compared to the principal amount. Gradually, through the repayment tenure, the principal component of your EMI will increase while the interest value will decrease. The total EMI value will continue to be constant all through the tenure period.
There are 6 different types of mortgage loans in India.
When a borrower simply mortgages his immovable asset to obtain a loan, its called a simple mortgage loan. In case of failure to repay, the lender has the right to sell the mortgaged property.
Here, the possession of the property is transferred to the lender who can collect rents or profits from it without creating any personal liability for the borrower.
It sets up a personal liability on the borrower, here the mortgaged property is transferred to the lender on the precondition that with the loan repayment it will be returned to the lender.
Here, a mortgagor apparently sells his property with terms that it becomes effective if he defaults in repayment but turns void on successful repayment.
The borrower deposits the title deed of the property as the security to be mortgaged with the lender against the loan to avail.
A mortgage that does not fall under either of the prior mentioned mortgage types is an anomalous mortgage.
These loans are a mix of the above types of mortgage to provide you with the best possible features. Avail them by following a simple Mortgage Loan process.