Types Of Mortgage Loans An Overview

By Author: Karma financial and realty solution
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Mortgage Loans: An Overview

A mortgage loan is a form of secured loan where you can make use of the funds by supplying the asset as collateral to the lender. This is a common method of financing, as it allows the borrower to make use of a high loan amount and a long-term repayment tenor.

A mortgage loan is typically a loan that is approved against an immovable object such as a house or commercial property. The lender holds the asset as collateral until the borrower repays the entire sum of the loan.

Mortgage loans are of 3 types:

• Home loans
• Commercial property loans
• Loans against properties

• Home Loans:

This is the most frequently sought-after home loan. Consumers are applying for small, medium, and substantial home loans as interest rates are competitive, durations are comfortable, and one gets a tax gain. One has the ability to refurbish, renovate, and rebuild the 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.

• Commercial property loans:

With India, the second-fastest growing economy in the world, demand for commercial property has increased in recent years. But it is not easy for a small business to own land, as it takes more capital than most of the young firms have. There is also a need for a commercial loan to help make the purchase possible.
While today's lenders are very proactive in providing home loans, commercial real estate developers are experiencing multiple rounds of document checks and delays of 60 to 90 days in approvals due to the high risk involved.

• Loans against properties:

The existing credit market offers a range of credit products to the borrower. Some of the credit items are to be used for a particular reason, such as a home loan or an educational loan, while others are to be used without limitations. These loans are called multipurpose loans.
Personal loan is the most commonly used multipurpose loan of today. But never neglect the fact that a personal loan is a costly credit product. Loan Against Property is one of the better alternatives to a personal loan (LAP). A property loan is a multipurpose, fast-processing and much cheaper credit product than a personal loan.