Mortgage Loan:Finer points explained

Updated: Friday, October 25, 2013, 15:34 [IST]

To meet out certain financial expenses that though cannot be avoided during the life course, banks and other financial institutions offer mortgage loan to individuals. Mortgage loan is nothing but loan against property that helps to finance certain unforeseen expenses or other regular expenses, including child's higher education, marriage expenses and such others. In such a financing mode, individuals hypothecate their property with the institution for the loan term as a collateral instrument.

Eligibility criteria for availing mortgage loan

Banks in India have put forth different eligibility criteria for availing mortgage loan. However some of the standard requirements include :

The primary condition to avail of and for the sanction of your mortgage loan is that you should be an Indian citizen with non-agricultural (residential / commercial) property. Age criteria for availing the facility is fixed at 18years -60 years by many banks. Also, all of the property owners have to apply for the mortgage loan as co-applicant.

Other requirements for the approval of the facility by the bank requires furnishing of Income Tax Returns. In case if individuals are not able to furnish the ITR, income tax certificate from the appropriate authorities can be accepted.

So, any individual possessing residential or commercial, non-agricultural property, free-hold or un-encumbered property subject to some terms and conditions can avail of the mortgage loan and fund different financial requirements.

Quantun of Loan Amount

Generally, the minimum amount tendered in case of mortgage loan stands at Rs. 2 lac. However, depending on the area as well as the customer class availing of the loan, banks even disburse an amount as high as Rs. 200 lakh to non-salaried or business class.

Repayment Term of Mortgage Loan

The repayment term for the mortgage loan varies from bank to bank and can be from 7years to 10 years.

Interest rate

Banks provide mortgage loans at the rate of interest (floating rate) i.e. usually base rate increased by some percentage. The Base rate is reviewed / revised by the Bank at least once in a quarter.

So, all in all mortgage loans comes as a respite for individuals in possession of some property who fail to meet some of the financial expenses from their own pocket.

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