What is the Mortgage Loan? – Do You Know the Meaning of Mortgage Loan?

Do You Know the Meaning of Mortgage Loan?

 

In mortgage loan, we borrow money from a bank or financial institution by mortgaging a property.

 

Sometimes, when there is a sudden need of money, we think of taking a loan. If you live in your house and you need money for some work, then you can take a loan by mortgaging that house with the bank. This is the easiest way to take a loan from the bank. This is called mortgage loan.

 

do-you-know-the-meaning-of-mortgage-loan

Do you know the meaning of mortgage loan?

 

In mortgage loan, we borrow money from a bank or financial institution by mortgaging a property.

 

Mortgage loan can also be taken to buy or build a new house. The mortgage loan amount depends on the condition of your property and the loan policy of the bank.

 

It is also known as loan against property.

 

What are the types of Mortgage Loans?

 

1. Equitable Mortgage or Oral Mortgage

 

In an Oral Mortgage Loan, Housing Finance Companies (HFCs) check your property documents and the loan is offered to you by signing the loan agreement.

 

There is no need to register a mortgage in an oral mortgage loan. Oral mortgage loan is very common in India, but most of the companies ask for property documents.

 

2. Registered Mortgage

 

In Registered Mortgage Loan, the mortgage is registered with the concerned authority. In fact, the charge on mortgage registration of your property gets recorded in the government data. In this method, the borrower usually pays the registration charges.

 

What are the other features of Mortgage Loan?

 

• In mortgage loan, you can take a loan up to 80% of the value of the property. In some cases the loan amount reaches up to 85-90%.

 

• The repayment tenure of the mortgage loan is decided by the HFC.

 

• The repayment period of the mortgage loan is known as the term of the loan. You can repay the mortgage loan through EMI in a predetermined tenor.

 

• The mortgage loan balance keeps on decreasing every day, monthly and annually.

 

• Just like you do a down payment for a home loan, the down payment amount in a mortgage loan can be as high as 10-20%.

 

• If you want, you can repay the mortgage loan ahead of time. Through prepayment, you can save interest by repaying the loan before the due date of the mortgage loan.

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