A mortgage loan is a secured loan where an applicant borrows a certain amount of money by mortgaging property. Hence, mortgage loans are also known as loans against property. Read ahead to know more about the various types of mortgage loans.
There are 6 types of mortgage loans in India, based on the nature of contract between the lender and borrower. They are described below -
This is one of the most popular mortgages in India. These points will make it clearer -
The following points will explain the English Mortgage in detail -
This is also referred to as the Equity Mortgage, and it is one of the two most popular ones in India. These points will explain it better -
Here are some points that will explain this type of mortgage in detail -
If you are searching for ‘usufructuary mortgage meaning’, it is important to iterate that this type of mortgage is not used in India commonly. It can be explained through these pointers -
This is a type of mortgage that cannot be classified under any of the previous five types. If a mortgage deed is too customized, and uses points from one or more of the five types of standard mortgages, it is referred to as an Anomalous Mortgage.
These two mortgages are the most commonly used in India. Let us look at the differences between them using this simple table -
|Simple / Registered Mortgage
|The title deed and property documents do not need to be submitted to the lender
|It is essential to submit the title deed and property documents to the lender
|The loan agreement happens between the lender and the borrower, but it is also registered at the sub-registrar’s office
|The loan agreement is signed just between the lender and the borrower
|After the dues have been paid, the lender issues a Memorandum of Release of Mortgage, which again needs to be registered at the sub-registrar’s office
|After the dues have been paid, the lender simply hands over all the property documents to the borrower and issues a No Dues Certificate
|It reflects in the encumbrance certificate
|Does not reflect in the encumbrance certificate
|It involves more hassle, but risks for both the lender and the borrower
|Involves higher risk, but is a hassle-free option, that takes lesser time and money
In India, mortgage loans are one of the most sought-after financial options, as they help raise funds using an existing property. They serve a great option where instead of selling your property, you can use it as collateral to get a loan and fulfill your diverse requirements.
The following are some common examples or types of mortgage loans in India -
If you are a property owner and are looking for a loan against it, you can choose any kind of mortgage loan depending on your need.
In case of a usufructuary mortgage, the borrower transfers the possession of the house to the lender, who can then collect rent and profits until the borrower returns the dues. Once the dues are paid off, the possession is supposed to be transferred back to the borrower or the owner.
A conventional mortgage loan is a type of loan that the government does not insure. It can be of two types - conforming or non-conforming.
Any customized type of mortgage loan, whose deed does not conform to either of the 5 types is referred to as an anomalous mortgage.
Yes, first-time home buyers can avail a mortgage loan, and most of them prefer it. There are various types of mortgage loans available for first-time home buyers in India.
Yes, all loan providers will run a CIBIL check before approving a loan. But in case of a mortgage loan, a low CIBIL score will not be a roadblock.
There are multiple benefits associated with a mortgage loan -
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