A property mortgage loan is a secured loan with comparatively low-interest rates. Thus, maximum borrowers tend to apply for a loan against property or mortgage loan for their big-ticket fund financial requirements.
Applicants owning a residential or commercial property can opt for this loan. However, applicants need to follow some steps and keep a check on certain factors before applying for a property loan.
Factors to keep in mind for property mortgage loan application
Here are some of the factors that one should keep in mind before applying for a mortgage loan:
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Credit score
The credit score is one of the major factors that can affect mortgage loan interest rates, It shows whether an applicant has a solid repayment history. Borrowers with a higher CIBIL score, preferably above 750, get faster approval for mortgage loans. Thus, applicants opting for a LAP should ensure they have a clean credit history.
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Eligibility criteria
Though the eligibility criteria to apply for a loan against property may vary from one lender to another, some basic requirements always remain the same. First, an applicant should be Indian citizens residing within this country’s boundary. Next, they should hold a stable income and meet the age limit as set by lending institutions. However, the eligibility criteria for a loan against property vary depending on whether applicants are self-employed or salaried.
For self-employed applicants:
- An applicant should be between 25 to 70 years
- He should be a residing Indian citizen
- Should have a stable income from own business
For salaried applicants:
- Age limit for a salaried individual is between 28 to 58 years
- Applicant should be an Indian citizen residing within the boundary of this country
- Should have at least 3 years of work experience in MNCs, private or public sectors, etc.
After checking the eligibility, applicants should arrange all the documents required to apply for a loan against property for quick and seamless loan approval.
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Interest rate
Being a secured loan, a comparatively lower interest rate is levied on loans against property. However, borrowers can compare the interest rates of different lenders and decide accordingly. Besides, individuals should select a lending institution that offers simple terms and conditions and does not have higher charges.
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Property type
Both residential and commercial properties are eligible as collateral for LAP, but the sanctioned amount and mortgage loan interest rate can vary depending on the property type.
For instance, a residential property with modern amenities situated in a prime location can fetch a higher loan amount and lower interest rate. Apart from that, the collateralised property should be devoid of any legal issues, irrespective of its type. It will help the borrower receive hassle-free and fastest loan approval.
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Loan amount
The sanctioned loan amount directly depends on the borrower’s property worth. Financial institutions assess the collateralised property’s market value and then sanction a certain percentage of that value as a mortgage loan. This percentage is known as the loan-to-value ratio or LTV ratio.
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Tenor
Choosing the tenor wisely can help a borrower repay the loan amount on time. Applicant choosing a long tenor can reduce their EMIs, but it will increase the interest outflow in the long run. However, a short tenor can help in saving a considerable amount, but it will increase the monthly payout amount. Thus, borrowers should assess their repayment capability and select the loan tenor accordingly.
Steps to follow while applying for a property mortgage loan in India
Borrowers can follow these easy steps to apply for a property mortgage loan in India:
Step 1: Applicants need to visit the selected lender’s official website
Step 2: Next, they should fill out the application form with the required personal and professional details as per the requirement
Step 3: After completing all these steps, borrowers should submit the application form and wait for a verification call
Step 4: Next, a representative of the lending institution will verify the essentials with the applicant
Step 5: The lending institution will disburse the sanctioned amount within the least possible time after approving the application
There are various reputed lenders that provide pre-approved offers. These are available on various financial products like home loans, etc. The applicants can check their pre-approved offers by entering their names and contact details on the required field. These offers will help to streamline the loan application and approval process.
Hence, an applicant should meet the eligibility criteria for LAP and follow the necessary guidelines before starting the application procedure. It will help them receive the maximum loan amount and other associated benefits.
