A Guide For Mortgaging a Property

by Mahesh DS Real Estate Developer

If you have lots of money and want to invest it in something secure and valuable, you look for putting the amount in buying a property. But, what when you have strained finances and you need some help with a huge amount of money? You don't want to sell off any of your assets like your home or car. Then, what do you do? In this case, you look for mortgaging your home, which is a great way to get a loan at a low interest rate to satisfy your current financial needs without having to sell off your home. However, before you decide on going in for a mortgage, make sure to keep a check on the following points.

Disputes

Make sure that the property you want loan against is not under any kind of dispute. It is necessary that all the owners of the property or all the right holders agree to take a loan against it. This will speed up the approval process of loan sanctioning.

Encumbrance

See to it that there is no encumbrance to the property, because if there is any, your loan will not be sanctioned. This is because encumbrance prohibits passing the title to the property and also diminishes its value. Encumbrances may be financial or non-financial and may include security interests, liens, servitudes, restrictions, leases, enroachments and more.

Home appraisal

The banks allow 70% of the total value of your home as your loan amount. To get the highest benefits, you need to make sure that you get your home appraised so that the right value of your loan is being considered by the bank. The higher the home's value, the better deal for you.

Tenure of loan

A loan against a property is given for a longer tenure as compared to a personal loan. On an average, a personal loan is given for 3 to 5 years while, loan against a property is given for 8 to 10 years. So, you must know how to take advantage of this factor. This is because the tenure of mortgage loan is decided depending upon the age of the applicant. The younger the owner, the higher the tenure. So, if there are multiple owners of a property, make sure to have the youngest eligible owner of the property to take the loan.

What documents are required for getting a loan against a property?

•       Photo identity proof - Passport / PAN card / voters ID Card / driving license

•       Residence address proof - Passport / ration card / utility bill

•       Ownership proof - Property documents / maintenance bill / electricity bill

•       Bank statement - Last one year statement of bank

•       Property documents - Copy of agreement, sales deed, share certificate, last maintenance bill, documents and sanction letter given by banker

•       Advance processing cheque to process loan documents for sanction

•       Investment proof (if any) - Fixed deposit / shares / fixed assets

•       Existing loans (if any) - Sanction letter, payment track record

•       Photograph - One coloured passport sized

•       Income proof - Last 3 months salary slips and form 16 (for salaried people) and last 3 years Income Tax Returns (for business owners)

•       Job continuity proof (for salaried people) - Current employee certificate / current job appointment letter / experience certificate

•       Business existence proof (for businessmen) - 3 years old SARAL copy / shop establishment Act / tax registration copy / company registration license

•       Office address and ownership proofs (for businessmen) - Property documents / maintenance bill / utility bill

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Created on Dec 31st 1969 18:00. Viewed 0 times.

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