A very common financing option is that of mortgage loan which is available at competitive interest rates. This is a type of secured loan where the applicant gets the loan against an immovable asset that he owns. In a mortgage loan, the person has to give his house or his commercial property as collateral.
Important facts that one needs to know about mortgage loans:
1. Are you aware of the 3 types of Mortgage loans?
- Home loans, loans against property, and commercial property are the three types of mortgage loans.
- A home loan can be used only to buy a home and a commercial property loan can be used only to buy a commercial property.
- But a loan against property can be used for different things like medical treatment, funding your child’s education, wedding, etc.
2. Amount that one can get as a mortgage loan:
- You must be keen to know the amount that you can get a mortgage loan
- Now many aspects are considered before sanctioning the amount of the mortgage loan.
- Factors like credit history of the applicant, income of the applicants, employment status of the applicant are some of the factors that are considered.
3. The age of the applicant matters a lot:
- In the case of mortgage loans, the age of the applicant is also an important factor that is considered.
- In the case of those applicants who have reached their retirement age, it may be tough to get mortgage loans. The chances of rejection of application of loan against property are high in the case of those applicants who are going to retire in a few years.
- But such applicants need not feel discouraged as they can explore the option of getting a loan that is of shorter duration.
4. Have you checked your credit history before applying for a mortgage loan?
- Before approving the mortgage loan application of the applicant, the lending institution checks the repayment capacity of the client.
- The creditworthiness and repayment capacity of the applicant is reflected in his credit score.
- It is therefore important that a person who wants to apply for a mortgage loan has a good credit history and he must take proper measures to maintain a good credit history and healthy credit score.
5. Your property documents need to be in place:
- If you are taking a loan against a property then it goes without saying that your property documents have to be in place.
- Before the loan is given to the applicant the lending institution checks if the property title is clear.
- Therefore before applying for the mortgage loan the applicant must ensure that all the documents like title deed, building plans, approvals, etc are in order.
6. Your employment status can make all the difference:
- To get a mortgage loan with ease it is important to have a regular flow of income.
- Having a regular income source convinces the lender that the applicant is in a position to pay the EMIs regularly.
- When we talk about employment status it is not just your income that matters. If you are habituated to switching jobs frequently then it reflects poorly on your job stability and in such cases, your mortgage loan application may get rejected by the financial institution.
7. Check the loan tenure while applying for the mortgage loan:
- Now if you have limited income then the amount of the EMI is going to matter a lot to you.
- In the case of short tenure loans, the EMI amount is higher and this might not be a comfortable option for you.
- So, if the applicant has a low income then he must explore the option of long tenure as then the repayment of the loan is spread over a longer time and hence the EMI amount is also low.
8. Get complete details about mortgage insurance:
- To reduce the risk of the borrower as well as the lender in case of an untoward situation you must explore the option of mortgage insurance.
- The mortgage insurance the loan repayment is covered and this helps to reduce the burden on the family of the borrower and even the lender knows that he is not going to lose his money.
- A mortgage loan thus helps in securing your financial interests.
9. Income tax returns just cannot be missed out on:
- Now inadequate ITR can make things tough for a self-employed person who wants to take a mortgage loan.
- In the case of mortgage loans, the financial institution asks for the last 3 years’ income tax return papers. Now if the self-employed individual is not able to furnish these details then his mortgage loan application can get rejected because this reflects that the applicant does not have a regular income flow.
To avail to different types of loans connect with Money View:
If you are interested in getting a personal loan with minimum documentation and in a hassle-free way then you must get in touch with Money View which is one of the topmost financial institutions in the country. You can check your eligibility for the Money View loan on the website or the app of the company.
Related Link: Mortgage Loan EMI calculator
Conclusion:
Your age, income, credit history, property papers, and many other factors have to be considered before you apply for a mortgage loan. Before you apply for the mortgage loan make sure that you consult a financial expert and check all the pros and cons of the mortgage loan.