To understand how to secure funding for a property mortgage loan, first, we need to get a brief idea about the meaning and other facts about a property mortgage loan. There may be a time when you need funding to finance your organisation. So you can acquire a loan assuring your property as a security against the loan.
The property secured can be your house, office, plots, etc. The mortgage interest rates on your loan will differ from bank to bank concerning the tenure of the loan. Once your application is accepted, you will instantly receive the amount based on the value of your assured property.
Benefits Of Applying For A Property Mortgage Loan
It may sound concerning; to put the property as a security against a loan, but it has several benefits.
- You can get a high amount based on the value of your property.
- The documentation process is quick and effortless.
- The interest rates are lower compared to other loans.
- Generally, prepayment is not available, but in the case of a property mortgage loan, you can prepay to close your loan resulting in lower charges.
- Generally, the tenure for this type of loan is long the EMI is very low as there is an inverse relationship between the time of the loan and EMI in property mortgage loans.
- Several types and terms are available when opting for a property mortgage loan. So you can easily compare and select accordingly.
Steps To Secure Funding For A Property Mortgage Loan
Completing The Application
The first step to secure a loan against property is accurately filling out the application form. It should contain your income details, personal details, income statement, employment status(salaried or self-employed), tax status, and all other required information. Make sure that you do not provide inaccurate or misrepresented information, as the bank will reject your application.
Verification Of Details
Once the application form is submitted, one of the bank representatives will call you to check out all details you have provided in the application, so try not to make mistakes while filling out the form, as the bank may reject it, which will result in loss of your time and effort.
The interest rate on the mortgage loan is relatively lower than other loans, the home loan interest rate today is higher, and mortgage interest rates starting at 9.15% per annum.
So it is better to compare the interest rates among different banks. Also, you should check the processing fee and other extra service charges. After evaluating all the expenses, you should choose the bank with the best services.
Submitting In All Required Documents
Certain documents are required when applying for a loan, so you must ensure that all your documents are up-to-date and do not contain any legal faults. The bank will ask for your KYC documents, proof of income, proof of address, ITR, bank statements, and papers of the secured property.
Checking Of Documents
After receiving the application and required documents, the bank will thoroughly analyse your background; check your personal details, place of work, financial standing, income statement, credit history, etc. The bank may send an official to visit you to have a better understanding of your needs, requirements, and financial position.
The bank will also check the market value of your collateral property and the legitimacy of the property’s documents. All these things will be done through the bank’s designated sources. At last, they will determine the LTV(loan to value) ratio. It will help to determine the loan value compared to the property’s value.
Approval Of Application
The bank will contact you regarding the rate of interest and other terms and conditions once the verification process is settled; after signing the loan agreement, the bank will instantly pay up the amount.
Applying for a property mortgage loan can be a pretty challenging task. Still, with the help of careful planning, research, and consideration, and keeping in mind your financial standing, credit score, and other important factors, you can achieve the funding you need. But, it is best to note that if you fail to repay the amount borrowed, the bank has full right to sell your assured property through an open auction.