If you require funds for meeting personal and business needs, you can avail a mortgage loan. A mortgage loan is a secured loan and generally, comes at a lower rate of interest and longer tenure. The interest rate on a mortgage loan is lower in comparison to unsecured loans and tenure of the mortgage loan goes up to 15 years. Both salaried and self-employed individuals can avail Loan against Property. There are many banks and NBFCs offering a mortgage loan. Different types of mortgage loan are available in the market, you can apply for the suitable type of mortgage loan which suits and fulfill your requirements.
Different Types of Mortgage Loans Available are :
- Simple Mortgage
In the simple mortgage, the property of borrower does not get transferred to the lender but the lender has a right to sell the property, in case, the borrower is not able to repay or pay back the loan amount on time.
- Regular Loan against property
Regular loan against property is the most common type of mortgage loan taken by the borrower for meeting personal and business needs. It is usually taken for the purpose of expansion of business, acquiring assets, funds for marriage or any medical emergency. Almost all banks and NBFCs grant mortgage loan for these purposes against residential property, commercial property, and industrial property.
- Loan Against Property Top Up
Top up loan is an additional loan amount that you can avail on your existing mortgage loan. This type of loan can be taken either from the existing bank or at the time of transferring your outstanding mortgage loan amount from one bank to another bank to avail low-interest rates. Generally, individuals prefer to take a top-up loan from another bank, when he/she is getting a lower rate of interest compared to the current running rate of interest.
- Reverse Mortgage
A reverse mortgage loan is available for senior citizens, above the age of 62 years. It allows them to borrow money on the value of their home. This loan type is more beneficial to those senior citizens who do not have any income support or regular income. In case of a reverse mortgage, the lender gives them a loan against the mortgage of their house. It must be the primary resident of the senior homeowners.
- Sub Prime Mortgage
Subprime Mortgage is the type of mortgage loan which is provided to the individual who has a poor credit score. As this loan is provided to one with a poor credit score, comes under high risk that is why the rate of interest of subprime mortgage is generally higher. This is to compensate the lender in case the loan applicant defaults in repaying the mortgage loan.
- Loan Against Property Overdraft
Loan Against Property Overdraft (LAP-OD) is a facility provided by banks to acquire short-term funds against an asset. This type of mortgage loan is highly suitable for the self-employed businessmen or professionals who have fluctuating income throughout the year. The rate of interest of Loan Against Property- Overdraft varies from 12 percent to 14.50 percent and tenure maximum goes up to 24 months. The limit might get renewed at different intervals, at the discretion of the lender.
Above these are the Different Types of Mortgage Loans Available in the market. You have to choose the best mortgage type which suits and fulfill your money requirement.