What is Mortgage Loans?
A mortgage is a loan in which property or real estate is used as collateral. The borrower enters into an agreement with the lender (usually a bank) wherein the borrower receives cash upfront then makes payments over a set time span until he pays back the lender in full.
Mortgage is popularly known as Loan against Property also. Technically, in both the cases we can say that there is a mortgage charge created on the house which has been put as a security.
Types of Mortgage:
- Equitable Mortgage or Oral Mortgage – In this case, Housing Finance Companies (HFCs) will check property documents and offer loan by signing a loan agreement. There is no need to get Mortgage registered. This is very common in India but most HFCs ask customers to pledge the property documents.
- Registered Mortgage – In this case, mortgage is registered with required authority. Charge is created against the property in Go .
Why Opt for a Mortgage Loan?
* The Rate of Interest (ROI) is normally lower than any other loan. We have seen a sharp decline is interest rates for Mortgage Loan (Loan against Property) in India in last few years. * A borrower can borrow more in case of Mortgage Loan.
