Amortgage loan is a suitable credit option for those who intend to avail a substantial loan amount at a competitive rate of interest. Though there are several financial institutions offering this secured credit at reasonable terms, one must consider a few things before applying for it.
Things to check
Intending borrowers should check out these factors –
Eligibility criteria
Usually, resident Indians with a stable source of income and belonging to a specific age group are preferred by lenders. Also, applicants with a CIBIL score higher than 750 and a clean credit history are more likely to secure a higher loan value at a reasonable rate of interest.
Documents required
To streamline the mortgage loan application process, applicants need to find out about the required set of documents to apply for a loan against property in advance. Usually, one needs to submit the proof of address, proof of identity, income proof and documents of the mortgaged property, among others.
Loan value
Though it extends a substantial loan amount to applicants, several factors play a role in deciding the sum. For instance, the value of the mortgaged property, lender’s LTV, applicant’s creditworthiness and the amount applied for. Usually, applicants get as much as 70 to 80% of their property value as loan amount; so getting one’s property valued before applying for a loan will prove useful in more ways than one.
Interest rate
Unlike unsecured loans, the property loan interest rate is considered to be more affordable. Nonetheless, rates can vary depending upon the interest type, loan value and applicant’s repayment capability.
Besides these, one must also make it a point to check factors like repayment options, mode of application and associated terms to make the most of the mortgage loan.
