Mortgage Loans

By Author: Karma financial and realty solution
Total Articles: 9
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A mortgage loan is a loan used either by real estate purchasers to generate revenue for the acquisition of real estate or, similarly, by current property owners to raise funds for any possible reason at the same time as a bond on the mortgaged property.

There are six types of mortgage loans available based on what the customers prefer.

Loan Against Property:

Loan against Property is commonly referred to as LAP. LAP is eligible for commercial and residential properties. Borrowers need to borrow their assets in order to get money from the lending institutions. The repayment of such loans shall be made on the basis of the EMI. These loans typically have a term of up to 15 years.

Commercial Purchase:

Commercial purchase loans are commonly used to purchase commercial assets such as a store, office space, and commercial complex. This loan is ideal for purchases of this kind. The interest rate offered by banks and NBFCs is competitive. Funds from this loan are specifically needed only to be used to purchase these assets.

Lease Rental Discounting:

Mortgage loans can be made against the ...
... leased assets. This is known as ‘rental discounting.’ The monthly rental sum itself is translated into EMI and the amount of the loan is issued on that basis. The length of the loan and the amount of the loan both depend on the duration of the loan as long as the property remains leased. The lease arrangement is referred to by the banks and NBFCs that provide the loan.

Second Mortgage Loan:

Banks and NBFCs provide the Second Mortgage Loan for assets already under loan. On the basis of the borrower’s credit score as well as the loan repayment history, the lender will provide the additional loan needed. The borrower must start paying the EMI for the second mortgage loan along with the first mortgage home loan.

Reverse Mortgage:

Reverse mortgage loans have recently been adopted in India. It is a special loan that is introduced for senior citizens. There are many elderly people who do not have a stable or sufficient monthly income supply. However many of them own real estate in one way or another. In this situation, they must hold their savings as mortgages with the bank or with the NBFC. The lender pays them a steady sum of income per month, like the EMIs. Upon the death of the senior citizen, the bank or the NBFC shall have the right to sell the land. The cost of the loan paid to senior citizens is immediately deducted from the amount of the selling of the house. The remaining sum shall be returned to the legitimate heirs of the deceased senior citizens.

Home Loan:

This is the most frequently sought after home loan. Consumers are applying for small, medium and real large home loans as interest rates are competitive, durations are comfortable and one gets a tax gain. One has the ability to refurnish, renovate, and rebuild their home. One may take a home loan to buy land, to build a house or to build a house on land that is purchased or even to purchase an under-construction property. This can be achieved with new or resale assets. However the funds that the creditor acknowledges as a loan must actually be used for the house only. Such funds should not be used for any other personal or business needs.