Overview
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.
Eligibility Criteria
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Age
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Income
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Employment
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Creditworthiness
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Loan-to-Value Ratio (LTV)
Key Features
Loan Amount
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.
Interest Rate
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.
Loan Tenure
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.
Tax Benefits
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.
Documents Requirements
Basic
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Completed Loan Application
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ID Proof Aadhaar,PAN card,Driving license, Voter Id or Passport
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Address Proof Bank Statement or Utility Bills - E.g.- Electricity Bill / Water Bill / Property Tax
Income Proof for Self-Employed Individuals:
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Balance Sheet and Profit & Loss Statements: certified by a Chartered Accountant.
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Income Tax Returns (ITR) ITRs for the past 2-3 years, along with computation of income and tax paid
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Bank Statements Usually for Last 6 months' bank statements of your personal and business accounts.
Income Proof for Salaried Individuals:
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Salary Slips: Recent salary slips (generally for the last 3 to 6 months).
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Form 16: Income Tax Return form issued by your employer.
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Bank Statements: Typically, the last 6 months' bank statements showing salary credits.
Employment/Business Proof
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For Salaried Individuals: Employment certificate, appointment letter, or work experience certificates.
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For Self-Employed Individuals: Business registration documents, GST registration, professional practice certificate, etc.
Property-related Documents:
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Sale deed or agreement for sale
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Approved building plan
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Property tax receipts
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Encumbrance certificate