Mortgage loans are an effective financial choice for those in need of substantial funding. As the loan amount is sanctioned against high-value collateral, borrowers are offered a lower mortgage loan interest rate. Moreover, borrowers can use the approved loan amount to address a wide range of financial goals(property loan interest rate).

Hence, individuals who want to reap the most from this type of financing option must have deep knowledge about certain things to make the borrowing cost-effective and avoid any future complications.

Points to Keep in Mind while Bagging a Mortgage Loan:

Borrowers considering availing of mortgage loans must keep the following factors in mind:

• Loan Amount-

It is a crucial parameter that borrowers must factor in while availing of a mortgage loan. Lenders provide the loan principal depending on a property’s current market value. Hence, individuals must shop around to find a lender offering the highest possible loan principal. It will help them make optimum use of their assets.

• Interest Rate-

Several lenders are offering mortgage loans at different rates. Moreover, property loan interest rate varies depending on applicants’ income, credit history, etc.; hence it is prudent for the borrower to research and settle for a lender offering an affordable interest rate. A slight difference in the interest rate impacts the repayment of the loan amount in the long run.

Additionally, lenders offer two types of loans against property interest rates. Borrowers must choose between fixed and floating interest rates at their convenience.

• Tax benefits-

Borrowers must be aware that they can only claim tax benefits under a mortgage loan if they use the sanctioned fund for specific requirements. For instance, under section 24(B) of the Income Tax Act, one can claim a tax deduction on interest to up to Rs.2 lakh on the interest payment of a mortgage loan like a home loan.

• Repayment Tenor-

Most lending institutions offer flexible repayment tenors of up to 20 years with mortgage loans. Borrowers need to balance loan tenor and EMI payments and then choose a suitable repayment period as per their suitability. A longer tenor may reduce the monthly installments; however, the interest outgo will increase. So, borrowers must choose the loan tenor accordingly, as the applicable property loan interest rate will depend on it.

• Additional fees and charges-

Additional charges like processing fees, penalty charges, legal fees, prepayment charges, service charges, etc., can significantly impact the cost of the loan. Therefore, borrowers must consider all these fees while evaluating the actual cost of borrowing. However, if borrowers have opted for floating interest rates, they can benefit from zero prepayment and foreclosure charges.

Furthermore, other factors like property valuation, an applicant’s creditworthiness, current state and location of a property, etc., are equally important as they will play a part in deciding the mortgage loan interest rate and should be considered while applying for a mortgage loan. Borrowers must also cross-check the eligibility and keep the necessary documents at the ready to avoid any delays.

Eligibility Criteria for Availing Mortgage Loan-

Borrowers need to adhere to the following eligibility criteria:

1. Applicants must be Indian.
2. The age bracket for a salaried individual is 23 to 62 years and 25 to 70 years for a self-employed individual.
3. Salaried applicants must have a work experience of 3 years in any reputed MNC or public/ private sectors.
4. Self-employed applicants must have a stable source of income.

Documents Required for Loan Application-

Applicants need to submit the following documents: 

• Address proof
• Income proof
• Copy of property documents.
• Bank account statements for the last three months (salaried individual)          
  • Bank account statements for the previous six months (self-employed individual)

However, the list of documents is lender specific; borrowers may have to submit additional documents as per the lender’s requirement.

Apart from checking the loan amount and interest rate, loan tenor borrowers can also look into the pre-approved offers of leading financial institutions. These offers are available on financial products like loans against property, home loans, etc. These offers accelerate the loan application process and save time. Prospective borrowers can check their pre-approved offers by entering their names and contact details.

To sum up, availing of a mortgage loan is a huge financial decision. Hence, to make an informed choice, borrowers must glance through the parameters mentioned above, like loan amount, mortgage loan interest rate, etc., before applying for credit and avoid any chances of rejection, for the latest blogs please visit our website..