Property loans simplified!!
Some of the basic rules and regulations that surround the mechanism of a property loan are as follows, although the terminology may vary from country to country:
1)Mortgage: It is the security interest of the creditor, which may result in restrictions to use or sell the property. Restrictions may include home insurance or mortgage insurance, or clearance of dues before selling the property.
2)Borrower: An individual who has created or is creating an ownership interest in the property.
3)Lender: Generally, a bank or third person party, who is responsible for collecting on the loan within the stipulated period.
4)Principal: The original size of the loan, which may include other costs incurred by the creditor. As the amount is cleared, the principle diminishes in size or amount.
5)Interest: The finance charges incurred for use of lender’s money, also must be cleared by the borrower.
6)Foreclosure or repossession: The possibility that the lender has to foreclose, repossess or seize the property under certain circumstances is essential to a mortgage loan; without this aspect, the loan is arguably no different from any other type of loan.
7)Completion: Legal completion of the mortgage deed, and hence the start of the mortgage.
8)Redemption: Final repayment of the amount outstanding, which may be a "natural redemption" at the end of the scheduled term or a lump sum redemption, typically when the borrower decides to sell the property. A closed mortgage account is said to be "redeemed".
If you are looking for the best loan against property in India, you would not have to look far, as all the information surrounding loans is available online
Many other characteristics are common to property loans not mentioned above. These are only some of the basic characteristics common to property loans. Governments usually regulate many aspects of such loans either directly (Legal requirements), or indirectly (through control of banking industry).
There are many different mortgage loan types used world-wide and some of the most common are as follows:
1) Interest: Interest may be fixed, and can change at certain pre-defined periods; the interest rate can also be higher or lower.
2)Term: Mortgage loans generally have a maximum term, that is, the number of years after which it has to be repaid.
3)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.
4)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.
Other types of loans may be fixed rate mortgages or floating rate mortgages. There are many other laws surrounding home loans and you should make an informed decision while approaching a bank or individual for home loans.
If you are looking for more information on property loans or want to apply home loan online in India, the author of this article recommends LOANCOUNSELLOR.
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