Loan disbursed against the mortgage of the property
is known as loan against property or mortgage loan.If any borrower owns any
kind of property- fully constructed, residential or commercial property, then
it is a wise decision to unlock the property potential and use it to provide a
shelter to the dreams and aspirations. If one goes by the traditional way of
mortgaging, they will end up to a bitter experience. Shrugging the traditional
way today’s world is looking forward to embrace the loan against property for
financing their personal desires of holiday plans, marriage of their children,
education cost, etc. provided by the banks and other financial organizations.
The features of loan against property are: firstly,
higher loan amount is available for longer tenures at attractive rates; secondly,
quick and hassle-free loan with speedy approvals; thirdly, residential and
commercial properties accepted as collateral. The benefits are like higher loan
amount with lower emi and flexible repayment options between drop line
overdraft facility or emi based loan repayment.
The borrower who wishes to avail the mortgage loan,
needs to fulfill certain criteria of having good CIBIL score, younger the
borrower, easier to get the loan sanctioned, job stability to secure the EMI
repayment. Some generic documents are required to be submitted like; proof of
residence, proof of identity, latest bank statement, salary slips of last six
months, form16 and copies of all property documents that one chooses to pledge
for the loan.The self-employed individual/professional needs to submit the
certified financial statement of last three years, latest bank statement, proof
of business existence, profit and loss statement of last three years along with
property papers and other basic documents.
If the borrower cannot fulfill the repayment
capacity for getting the mortgage loan sanctioned, then they can add a
co-applicant. The loan providing organization will check on the co-applicant to
confirm, that, both the borrower and co-borrower can repay the mortgage loan
amount or not.
Banks and the financial company provides the loan at
different rate of interest depending on the pledged property type like; HDFC loan against home
loan for commercial property varies from 10.10%-10.60%; loan against rent
receivables attracts 9.85-10.35%, for dropline over draft against property the
rate is 10.60-11.10%.
The mortgaged property acts as a security deposit
for the money that the banks or financial companies provide as loan. The
original papers of the property remain under the lending organization’s
custody.
The loan tenure can be of fifteen years. This type
of loan takes longer to get sanctioned as the organization needs time to
scrutinize the applicant’s details and the property details. It covers
commercial, residential and industrial properties. Property on lease or bounded
by power of attorney is not accepted as collateral for the mortgage loan.
Before applying for the loan one must ensure that
the loan procedure should suit the purpose and the purse. So choose the lending
organization diligently. The borrower must pay special attention to the tenure
of loan, longer tenure results higher outflow of interest.
The value of the HDFC loan against property amount
depends on the market value of the mortgaged property; the banks and financial
organization provide 40-60% of the property value. If one fails to clear their
debts, the lending organization has full authority to seize the property and
sell it to get the lending amount. So it is advisable to the borrowers to avoid
such kind of situation one must pay the EMI in time.
