Loan Against Property/Mortgage/Home Equity

A home equity loan is a type of loan in which the borrower uses the equity of his or her home as collateral. The loan amount is determined by the value of the property, and the value of the property is determined by a valuer from the financial institution.

mortgage loan is used either by purchasers of real property to raise funds to buy real estate, or alternatively by existing property owners to raise funds for any purpose, while putting a lien on the property being mortgaged. The loan is "secured" on the borrower's property through a process known as mortgage origination. This means that a legal mechanism is put into place which allows the lender to take possession and sell the secured property ("foreclosure" or "repossession") to pay off the loan in the event the borrower defaults on the loan or otherwise fails to abide by its terms. A mortgage can also be described as "a borrower giving consideration in the form of collateral for a benefit (loan)".

Mortgage borrowers can be individuals mortgaging their home or they can be businesses mortgaging commercial property (for example, their own business premises, residential property let to tenants, or an investment portfolio). The lender will typically be a financial institution, such as a bank, credit union or building society, depending on the country concerned, and the loan arrangements can be made either directly or indirectly through intermediaries. Features of mortgage loans such as the size of the loan, maturity of the loan, interest rate, method of paying off the loan, and other characteristics can vary considerably. The lender's rights over the secured property take priority over the borrower's other creditors, which means that if the borrower becomes bankrupt or insolvent, the other creditors will only be repaid the debts owed to them from a sale of the secured property if the mortgage lender is repaid in full first.

Mortgage loan types

There are many types of mortgages used worldwide, but several factors broadly define the characteristics of the mortgage. All of these may be subject to local regulation and legal requirements.

  • Interest: Interest may be fixed for the life of the loan or variable, and change at certain pre-defined periods; the interest rate can also, of course, be higher or lower.
  • Term: Mortgage loans generally have a maximum term, that is, the number of years after which an amortizing loan will be repaid. Some mortgage loans may have no amortization, or require full repayment of any remaining balance at a certain date, or even negative amortization.
  • Payment amount and frequency: The amount paid per period and the frequency of payments; in some cases, the amount paid per period may change or the borrower may have the option to increase or decrease the amount paid.
  • Prepayment: Some types of mortgages may limit or restrict prepayment of all or a portion of the loan, or require payment of a penalty to the lender for prepayment. 

Loan Eligibility is calculated after considering various factors including monthly income, fixed monthly obligation, current age, Property value, retirement age etc.

List of Loan Against Property Documents Checklist for Salaried Person

  • Photo Identity Proof: Any One from the following;
    1. Passport
    2. Pan Card
    3. Voters ID Card
    4. Drivnig License
  • Residence Address Proof: Any One from the following;
    1. Passport
    2. Ration Card
    3. Utility Bill
  • Residence Ownership Proof: Any One from the following;
    1. Property Documents
    2. Maintenance Bill
    3. Electricity Bill
  • Income Proof: Latest 3 months Salary Slips and Form 16.
  • Job Continuity Proof: Any One from the following;
    1. Current Employment Certificate
    2. Current Job Appointment letter (if it is more than 2 years)
    3. Experience Certificate (including your previous job certificate or appointment and relieving letter)
  • Bank Statement: Latest 1 year statement where your salary is getting credited
  • Existing loan track if applicable
  • Property Documents: Property documents to be submitted based on the purchase of your dream home.
    1. Copy of agreement executed / Sales Deed.
    2. Share Certificate.
    3. Latest Maintenance Bill.
    4. List of documents & sanction letter given by Existing Banker (If Applicable).
  • Advance Processing Cheque required to process loan documents for sanction.
  • Investment Proof (if any): please submit if any investment like, Fixed Deposit, Shares, Fixed Assets, etc.,
  • 1 passport size color photograph

 

 

List of Loan Against Property Documents Checklist for Self Employed Business Person

  • Photo Identity Proof: Any One from the following;
    1. Passport
    2. Pan Card
    3. Voters ID Card
    4. Drivnig License
  • Residence Address Proof: Any One from the following;
    1. Passport
    2. Ration Card
    3. Utility Bill
  • Residence Ownership Proof: Any One from the following;
    1. Property Documents
    2. Maintenance Bill
    3. Electricity Bill
  • Office Address Proof: Any One from the following;
    1. Property Documents (if any)
    2. Maintenance Bill (if any)
    3. Utility Bill
  • Office Ownership Proof (if any): Any One from the following;
    1. Property Documents
    2. Maintenance Bill
    3. Electricity Bill
  • Business Existence Proof: Any One from the following;
    1. 3 years old Saral Copy
    2. Shop Establishment Act
    3. Any Tax Registration Copy
    4. Company Registration license
  • Income Proof: Latest 3 years Income Tax Returs including Computatin of Income, Profit and Loss Account, Balance Sheet, Audit Report, etc.,
  • Bank Statement: Latest 1 year bank statement both current and savings.
  • Property Documents: Property documents to be submitted based on the purchase of your dream home.
    1. Copy of agreement executed / Sales Deed.
    2. Share Certificate.
    3. Latest Maintenance Bill.
    4. List of documents & sanction letter given by Existing Banker (If Applicable).