A Loan Against Property is a type of mortgage loan that the lender sanctions to you only when you pledge a property or asset with them as security. While this is a handy option for many, it is still crucial that you have all the facts one must possess before proceeding with their loan application. One such detail is the property profile, which includes ensuring that the property intended to be mortgaged is dispute free and eligible for a loan from your lender. Below is what you should consider before you mortgage your property and secure ample funding for your needs.
Instances of fraud are quite common in the financial market and in this case, a property may have a loan already sanctioned against it. To check if a property is mortgaged already, you will need to access the CERSAI registry and search based on asset details or debtor’s details.
Once you are certain that the property isn’t mortgaged, you can proceed to pledge it as an asset. It is important to know the different accepted property types in mortgage undertakings. Here are the types of property you can pledge:
- You can pledge a self-occupied residential property as security
- You can use a rented residential property as collateral (that you own)
- You can also pledge a commercial property that is being used or is vacant as security
Apart from these common mortgage property types, you can also pledge a property that you co-own with your relative. However, in such cases, the loan must be availed jointly, with all co-owners as co-applicants. Keeping these pointers in mind you can proceed to check the valuation of your property, as your loan amount is determined based on your property’s value.
Also Read: What is the Mortgage Loan Process
To avoid unforeseen loan application rejections and to maximise your chances of being approved with ease, you can pre-emptively check your mortgage loan eligibility. Bajaj Housing Finance allows you to use simple online eligibility tools to determine your property’s valuation, based on which you can apply for a loan. To use the Loan to Value Calculator, all you need to do is enter some basic details about your income and the property’s valuation, to derive the total loan amount you are eligible to apply for.
Here are the steps involved:
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Choose your employment status and the type of property you want to pledge
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Estimate the approximate value of the property you want to pledge on the calculator slider
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Assess the eligible loan amount the calculator deduces from the information provided by you
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Choose the tenor and interest rate to calculate your EMIs for the mortgage loan
The Bajaj Housing Finance Loan Against Property comes with attractive benefits, which prioritise your convenience at every step. It has quick loan processing protocols, relaxed requirements to qualify for finance, and allows you to apply for the loan with minimal documentation. What’s more, the documents needed to process the loan are picked from your registered address, further minimising the effort required. To borrow quickly and in a hassle-free manner, apply online at the earliest.
*Terms and conditions apply
Frequently Asked Questions
A mortgage is a specific type of loan that is secured by real property, typically used to finance the purchase of a home or property. It involves pledging the property as collateral, allowing the lender to seize the property through foreclosure if the borrower defaults on the loan. Loans, on the other hand, are a broader term encompassing various types of borrowing, which may or may not involve collateral, and can be used for different purposes such as education, vehicles, or personal expenses.
In India, the most common type of mortgage loan is the Home Loan. Home loans are specifically designed to finance the purchase or construction of residential properties. They are long-term loans secured by the property being financed. Home loans are offered by various financial institutions such as banks, housing finance companies, and non-banking financial companies (NBFCs). The interest rates and terms of home loans can vary depending on factors such as the borrower's creditworthiness, loan amount, and prevailing market conditions.
In India, mortgage loans for home purchase are eligible for tax exemptions under certain conditions. The tax benefits associated with mortgage loans include deductions on both the interest paid and the principal repayment. Under Section 24(b) of the Income Tax Act, you can claim a deduction on the interest paid on your home loan. Additionally, the principal repayment towards your home loan is eligible for deduction under Section 80C of the Income Tax Act.
The formula is as follows:
M = P * (r * (1+r)^n) / ((1+r)^n - 1)
Where: M = Monthly mortgage payment, P = Principal loan amount, r = Monthly interest rate (annual interest rate divided by 12 and converted to decimal) and n = Number of monthly payments (loan tenure in months)
