During the course of life, we come across some of the situations in which we are in table to avoid some expenses sashes Business expansion, marriage, medical emergencies or higher education. So as to meet these needs, sometimes an individual would have to avail a Mortgage Loan.
Here in this article, we'll get deep insight into that!
What do you mean by mortgage loan?
Mortgage Loan is a loan which is against the property like residential place, non agricultural land or commercial shop. In case you choose residential or commercial property to avail the loan, then it is important that the house is fully constructed. The property should have good marketable value and should be free from mortgage or other charge on property.
One of the biggest advantages that mortgage loan offers an individual is that it helps in generating additional income from an idle property. This type of loan is considered best for those who already owns a property and is urgently in need of some finances due to some situations. But the most important requirement for the property is that it should be free from any encumbrance which means that it is not offered as security for any other purpose. By keeping mortgage this property, the borrower shows collateral in the form of property. But, the person still has the right to you own the property when he pays the total loan amount.
Who provides mortgage loans?
Mortgage loans are provided by a number of banks like Bank of Baroda, Central Bank of India, Punjab National Bank, State Bank of India and Union Bank of India and more.
What are the two types of loan?
Mortgage loans are of two types:
- Term loan: It is offer against the security of an individual’s immovable property. The interest rate that is charged on term loan is lower than the overdraft loan.
- Overdraft loan: In this type of loan, the loan amount is disbursed in installments. The interest rate charged on the overdraft loan is generally higher than the term loan. Also this type of loan is available for one year only and is reviewed annually.
Who can avail this loan?
Mortgage loans can be availed by the individuals, salaried employees, self-employed, professionals and businessman. Loan application can be applied by the individuals and by the co-applicant also. This loan can be taken for a number of purposes which requires urgent finances. But while you avail this loan, it is important that you ensure the fact that the loan amount is not being taken for illegal purposes or for any kind of speculative activity.