Mortgage Loan Overview

1. For an online application, go to the lender's website and choose the product you wish to apply for.
2. If they entertain online applications, you will find an 'Apply Now' option on the page.
3. Depending on the process, you may have to fill an online application form and submit the details.

Offline

You can also go to the nearest branch, request for an application, and submit it along with the required documents.

Here's a look into the application process for a mortgage loan:

1. Document collection to process the loan
2. Credit appraisal by the bank
3. Verification of personal/business information provided
4. Sanction letter delivered via post and email post approval
5. Request for disbursal
6. Property documents collection
7. Evaluation of your property and its documents
8. Post successful verification, disbursement cheque delivered

Types of Mortgage Loans 

The types of mortgage loans are: 

1. Simple Mortgage: Understanding the essence of the term "mortgage" involves exploring various types, with the simple mortgage being fundamental. In essence, a simple mortgage is an agreement that grants the lender the right to liquidate the collateral property in case of borrower default, without transferring the property title to the lender. 
2. Sub Mortgage: The mortgage meaning of sub-mortgage caters to borrowers with compromised credit histories. Lenders may provide loans at elevated mortgage interest rates to mitigate the risk of payment defaults. Borrowers need to understand these heightened rates and their implications. 
3. English Mortgage: Expanding the scope of mortgage meaning, the English mortgage allows the lender to take possession of the collateral if the borrower defaults within the agreed tenure. The intricacies, such as mortgage interest rates, may vary based on the agreement. 
4. Usufructuary Mortgage: Digging deeper into the meaning of mortgage, the usufructuary mortgage involves handing over the property to the lender, not for outright ownership, but to earn profits from it. In this scenario, the lender has temporary rights to the property to generate income.

Eligibility for Mortgage Loan

To get approved for a mortgage loan, you need to fulfil the eligibility criteria set by banks and financial institutions. While the criteria may vary from bank to bank, listed below are general factors that determine your eligibility:

1. Gross annual/monthly income
2. Minimum age requirement of 21 years
3. Valuation of your property
4. Income proof documentation
5. Existing liabilities
6. Number of dependants

Whether you're salaried or self-employed, you're eligible for a mortgage loan.

Documents Required for a Mortgage Loan

The documentation required for the loan application varies based on your employment status i.e., self-employed or salaried.

If you're a salaried individual, listed below are some documents you may be asked to submit:

1. Duly filled loan application form
2. Passport-size photographs
3. Identity proof (PAN card, Aaadhaar card, passport, driving licence, voter ID card, etc.)
4. Address proof (electricity bill, ration card, Aaadhaar card, driving licence, rental agreement)
5. Latest salary slips
6. Form 16 issued by employer
7. Latest bank statements
8. Processing fee cheque

If you're a self-employed professional/individual, you may be required to submit the following documents:

1. Duly filled loan application form
2. Passport-size photograph

1. Identity proof (PAN card, Aaadhar card, passport, driving licence, voter ID card, etc.)

1. Business proof
2. Financial statements for the last 3 years
3. Latest income tax return certificates (last 3 years)
4. Profit and loss statement (P&L)
5. Latest bank statements
6. Cheque for processing fee

How does a Mortgage Loan Work? 

1. A mortgage loan is a contractual agreement in which a borrower offers property as security to a lender in exchange for a loan.
2. The core concept of a mortgage lies in the property serving as collateral.
3. Borrowers are then required to repay the loan, usually in monthly instalments, covering both principal and mortgage interest rates.
4. An important characteristic of how mortgage loans operate is their responsiveness to market conditions and the prevailing interest rate environment.
5. In the event of a decline in market mortgage rates, borrowers may consider refinancing, essentially replacing their existing loan with a new one, in the hope of securing more favourable terms.
6. Reverse mortgages represent another dimension of mortgage loans. This type of mortgage provides senior citizens with a unique avenue to generate income for meeting living expenses.
7. Through reverse mortgages, seniors can tap into their home equity, converting it into regular income streams to ensure financial security in their retirement years. Thus, a mortgage loan transcends mere borrowing; it is a multifaceted financing option.

Mortgage Loan Interest Rates Offered by Various Banks

HDFC Bank Mortgage Loan Details

Benefits/key highlights:

1. You can mortgage both commercial and residential properties for the HDFC Bank Loan Against Property scheme.
2. This loan is available against freehold and fully constructed commercial and residential properties.
3. This loan is available for both salaried and self-employed individuals.
4. You can either apply for the loan individually or jointly with a co-applicant.
5. You can make payments on a monthly basis for up to 15 years.
6. If you're an existing HDFC customer, you'll get a maximum margin of 60% of your property's market value.
   
7. The documentation is hassle-free with minimal requirements and you can expect a quick disbursal of the loan.

Penalties/internal charges:

1. Any delays in interest or EMI payments will attract an additional interest of up to 24% p.a.
2. You will be charged up to Rs.500 for an increase or decrease in your loan term. This amount is exclusive of any applicable taxes.
3. The pre-payment charges for loans sanctioned with a company/firm/sole proprietorship or HUF as an applicant are as follows:
   1. Loans prepaid within the first six months will attract a charge of 2% plus taxes and other charges.
   2. No prepayment charges if 25% of the loan is paid after six months and within 36 months.
   3. No prepayment charges if the loan is paid after 36 months.

State Bank of India Mortgage Loan Details

Benefits/key highlights:

1. The SBI Loans Against Property scheme can be borrowed against residential as well as select commercial properties.
2. Your rental income may also be taken into account for loan eligibility.
3. Employed, professional, and self-employed individuals are eligible for this loan. Even NRIs who have properties in their own name or an immediate family member's name can borrow this loan.
4. The minimum amount that you can borrow through SBI Loans Against Property is Rs.10 lakh, and the maximum is Rs.7.5 crore subject to the location of the property.
5. The minimum and maximum tenor of the loan is 5 years and 15 years respectively.

1. Repayment tenure of up to 15 years.
2. The interest rates on your loan are charged using the daily reducing balance method.

Penalties/internal charges:

1. You'll be charged Rs.250 for every bounced cheque, ECS, or SI dishonours.
2. Any delays in payments will attract a penal interest of 2% p.a. on the overdue amount.

Axis Bank Mortgage Loan Details

Benefits/key highlights:

1. You can borrow the Axis Bank Loan Against Property against residential and commercial property or for the purchase of a commercial property.
2. There are three variants available—Asset Power, Dropline Overdraft Against Property/Commercial OD against Property, and Lease Rental Discounting.
3. You can transfer your existing loan to Axis Bank as well.
4. The minimum loan amount that can be borrowed through Asset Power (Loan Against Property), Lease Rental Discounting, Reverse Mortgage Loan as well as Overdraft Facility Against Property is Rs.5 lakh and the maximum is Rs.5 crore, and the maximum tenure is set at 20 years for Loan Against Property, 9 years for Lease Rental Discounting, 10 years for Overdraft Facility Against Property, and 20 years for Reverse Mortgage Loan.
5. Salaried individuals, self-employed individuals, and self-employed professionals can apply for this loan.
6. Only select self-employed professionals are eligible for this loan:
   1. Chartered accountants
   2. Doctors
   3. Architects
   4. Engineers
   5. Cost accountants
   6. Dentists
   7. Management consultants
   8. Company secretary
7. A 40% to 50% margin is granted for a loan against your commercial or residential property.
8. Up to 70% of the value of the property may be provided as a loan.
9. The loan can be sanctioned in five days.

Penalties/internal charges:

1. If there are any overdue instalments, you'll be charged a penal interest of 24% p.a., which equals to 2% per month.
2. Bounced cheques will attract a fee of Rs.500 per instance.
3. Switching your interest rate from a higher floating rate to a lower floating rate will attract a 0.5% charge on the outstanding principal.

HSBC Bank Mortgage Loan Features

Benefits/key highlights:

1. Secure the HSBC Smart Loan Against Property scheme by submitting your residential property as collateral.
2. The application will be processed within five days of submitting all the completed documents. It will take another three days for the evaluation of your property.
3. Processing of the loan will take four days once you've submitted your documents and the amount will be disbursed with two days of submitting the completed loan agreement.
4. The maximum amount you can borrow is Rs.40 crore and the maximum tenure of the loan can extend up to 15 years.
5. The documentation process is simple and hassle-free.
6. You enjoy free unlimited access to HSBC ATMs and five free transactions per month at other banks' ATMs.
   

Penalties/internal charges:

1. Converting your loan to another variant will attract a conversion fee of 0.50% on your outstanding limit plus any additional applicable taxes.
2. If your cheque bounces or you dishonour the SI, you'll be charged Rs.250 for each delayed instalment.
3. You'll be charged a 2% penal interest over your existing interest rate if you miss your monthly payments.
4. There's a non-utilisation fee of up to 1% that is charged on amounts above 25% of your sanctioned loan.

PNB Housing Finance Mortgage Loan Details

Benefits/key highlights:

1. Pledge your immovable residential or commercial property to get the PNB Housing Loan Against Property scheme.
2. The sanctioned amount can be used for various personal or business reasons:
   1. Education
   2. Medical expenses
   3. Children's marriage
   4. Home renovation
   5. Purchase of high-cost consumer durables
   6. Expansion of business
   7. Travelling overseas
3. You get up to 60% of your property's market value as the sanctioned loan amount.
4. You need to be a salaried or self-employed individual or professional to be eligible for the loan.

Penalties/internal charges:

1. For inspection of your property, you will be charged Rs.250 plus applicable GST per inspection. This will be conducted at least once a year for regular accounts, once every half year for irregular accounts, and once in three months for NPA accounts.

IDFC First Bank Mortgage Loan Benefits & Rates

Benefits/key highlights:

1. The documentation is quick and simple.
2. Take advantage of the option to transfer your existing loan with a top-up at attractive interest rates with us.
3. Secure a loan against rental income (LRD) or for purchasing a commercial property (LCP)/Plot.

Penalties/internal charges:

1. For every bounced EMI, you will be charged Rs.500.
2. You will be charged a 2% penalty interest on non-payments for a month.
3. Individual borrowers don't have to pay any fees for foreclosure of their floating rate or fixed rate loans.

Karur Vysya Bank Mortgage Loan Overview

Benefits/key highlights:

A mortgage loan comes with the following attractive features and benefits:

1. Only resident individuals can apply for the Karur Vysya Bank Mortgage Loan.
2. This loan is available in two variants—Overdraft facility and term loan (EMI).
3. You can get this loan to fulfil your personal or business needs, which include health and education-related reasons.
4. The property should be in the applicant's name. If you own the property jointly, the other title holders have to join as co-applicants.
5. Only residential and commercial buildings owned by Indian residents are accepted as securities. The following types of properties are not eligible as collateral for this loan:
   1. Godowns
   2. Restaurants
   3. Factories
   4. Cinema halls
   5. Agricultural properties
   6. Schools
6. The application and approval processes are paperless and convenient.
7. Depending on your rating and CIBIL score, the loan can be sanctioned in 15 minutes.

Union Bank of India Mortgage Loan Details

Benefits/key highlights:

1. You can get the Union Bank of India Mortgage Loan by submitting your commercial or residential property. However, agricultural properties are not accepted as collateral.
2. You can use the sanctioned loan amount to meet various expenses, both personal and business.
3. If you're an Indian resident, you can get up to Rs.10 crore as the loan.
4. Agriculturists can get up to Rs.1 crore and NRI applicants can get up to Rs.15 crore.
5. Salaried individuals only have access to the term loan facility.
6. Non-salaried individuals have access to both overdraft and term loan facilities.

Penalties/internal charges:

1. If this loan is taken over by another financial institution or bank, you will be charged a 2% penalty fee on the average balance from the past 12 months.

IDBI Bank Mortgage Loan Features

Benefits/key highlights:

1. IDBI Bank has two variants of mortgage loans - Loan Against Property and Loan Against Property with Interest Saver (LAPIS). 
2. This loan can be used for an array of personal or business needs like medical expenses, education or marriage expenses, home renovation, buying a house, or business expansion. 
3. The maximum amount you can borrow is Rs.10 crore and the repayment tenures are quite flexible, extending up to 15 years. 
4. If you apply for LAPIs, it will be linked to your Flexi Current Account. You have the flexibility of withdrawing surplus or idle money that is deposited in this account. 

Penalties/internal charges:

1. You will be charged a 2% penal interest for the overdue period and amount.
2. Changing your loan to another variant will attract a conversion charge of Rs.10,000 plus the applicable taxes.

Federal Bank Mortgage Loan Benefits

Benefits/key highlights:

1. The Federal Bank Property Power scheme is available as a term loan, working capital loan, or a demand loan.
2. Indian residents, non-residents, and PIOs can apply for this loan.
3. You can pledge your residential and commercial property, and plot as security to avail this loan.
4. You can opt for a balance transfer programme with additional finances.
5. There is a surrogate scheme for self-employed individuals.
6. The loan is processed quickly and requires minimal paperwork.

Features and Benefits of Mortgage Loan

1. It is a cost effective way of borrowing. Normally, you can take a mortgage loan for a longer duration and pay off your repayment by using smaller monthly EMIs.
2. Mortgage loans charge lower rates of interest on your borrowings than any other loans.
3. Mortgage loan is a secured loan. It is secured against your property. The bank or lender has the right to repossess your property if you can't repay your loan.
4. A mortgage loan helps you buy your own house. You can afford to buy a home with the help of this loan and be the sole owner of your property once repayment is over.
5. You can get loans against under construction property, fully constructed property, freehold residential and commercial properties for:
6. Get loan for a longer tenure.
7. Repay your loan with a simple repayment process through monthly instalments. You can pay it off by paying smaller monthly EMIs.
8. Mortgage loans are offered at attractive interest rates.
9. Enjoy an easy and hassle free documentation process.
10. You can get a mortgage loan anywhere in India with integrated branch network provided by banks.
11. You can choose from a number of interest rates to pay off your loan. They include - floating rates, fixed interest rates, interest-only mortgage and Payment option ARMs.
12. Get access to a higher amount of funds.
13. Mortgage loan can be sectioned even before you select your property.
14. You can apply for it both online and offline and enjoy doorstep services.
15. Both residential and commercial properties are accepted as collateral for mortgage loans.
16. Funds received from a mortgage loan can be used for business as well as personal needs.
17. Self -employed individuals get customized loan options.

Things to Consider Before Applying for a Mortgage Loan

Before you decide to opt for a mortgage loan, there are certain factors you need to evaluate. Let's find out what they are in the section below:

1. Interest rate: Depending on the lender, you may get interest rates anywhere between 11% to 15%. You can choose to get a floating rate loan or a fixed rate loan.
2. Fees and charges: Processing fees, documentation charges, application fees, property inspection fees, loan overdue fees, late payment penalties, loan conversion fees- these are just some of the charges you need to take into account. These fees can increase the cost of your loan.
3. Tenure: The repayment period offered by lenders can go up to 15 years. However, if you're choosing an overdraft facility for your mortgage loan, the tenure may be much lower.
4. Repayment schedule: This also differs from bank to bank. While most banks offer an EMI option for the mortgage loan, there are other repayment options available too. It's important to clarify this with your lender before getting the loan.
5. Eligibility criteria: The criterion for the loan changes on the type of employment, your residency status, your income, your age, among other factors. Always check the criteria with your lender before applying for the loan.

1. Loan amount: For a mortgage loan, you're required to submit your residential or commercial property as collateral. The sanctioned amount depends on the metric value of your property. 

Most banks and financial institutions have a 40% to 60% margin. Other factors considered are the property’s condition and age. 

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