A mortgage loan is a type of loan that is secured by real estate or property. It is commonly used by individuals or businesses to purchase a home or commercial property.
Mortgage loans are a significant financial commitment, and it is crucial to research and compare different lenders, their interest rates, fees, and repayment terms before selecting the most suitable mortgage loan option.
The property being financed serves as collateral for the loan, which means that if the borrower fails to repay the loan, the lender has the right to seize the property and sell it to recover the outstanding balance.
The loan amount for a mortgage loan is determined based on the value of the property being financed. Lenders typically finance a certain percentage of the property's value, which can range from 75% to 90% of the property's market value.
Mortgage loans can have fixed or floating interest rates. Fixed interest rates remain constant throughout the loan tenure, while floating rates fluctuate with market conditions.
Mortgage loans generally have long repayment tenures, often ranging from 15 to 30 years. The repayment period depends on factors such as the borrower's age, income, and the lender's policies.
Homeowners in India can avail tax benefits on the principal repayment and interest paid on mortgage loans under the Income Tax Act, subject to certain conditions and limits. These benefits can help reduce the overall tax liability.
This is the most common type of mortgage loan used to finance the purchase of a residential property. It enables borrowers to buy a new or resale home. The loan amount is based on the property's value, and the repayment tenure can vary from 15 to 30 years.
This type of loan is specifically designed for individuals who want to construct a house on their own land. The loan amount is disbursed in stages as the construction progresses, and the borrower pays interest only on the amount disbursed until the property is completed. After construction, it can be converted into a regular home loan.
LAP allows borrowers to mortgage their owned residential or commercial property to avail a loan. The loan amount is based on the property's value, and it can be used for various purposes, such as business expansion, education, medical expenses, or debt consolidation.
Plot purchase loans are designed to finance the purchase of a vacant plot of land for residential or investment purposes. The loan amount is based on the plot's value, and it can be availed by individuals looking to build a home on the plot in the future.
Reverse mortgage loans are available for senior citizens aged 60 and above. It allows them to convert a part of their owned residential property's value into regular cash flow.
