Mortgage Loan: Introduction
Mortgage loan is a type of secured loan that you can avail by keeping an immovable asset as mortgage with the lender. The asset can be a residential/ commercial property or other immovable properties like heavy machinery.
This type of loan is secured on the borrower's property as per process which is called mortgage origination. Such loans are long-term advances with repayment tenors ranging to 15 years and interest rates much lower compared to unsecured advances. You can utilise the loan amount to meet diverse funding needs involving big-ticket expenditures.
Overseas education, a grand wedding, growing business needs, or unforeseen medical expenses – no matter what your need may be, finance them easily with a Bajaj Finserv Mortgage Loan. Bajaj Finserv now offers mortgage loans customised to the needs of salaried and self-employed individuals.
Purpose of mortgage loan
The primary purpose of a mortgage loan is to provide financial assistance to individuals or businesses for the purchase or refinancing of real estate properties. Here are the main purposes of a mortgage loan:
- Home purchase: One of the most common reasons people seek a mortgage loan is to buy a residential property, such as a house or an apartment. Since properties often have high price tags, most individuals cannot afford to pay the entire amount upfront. A mortgage loan allows them to borrow a significant portion of the property's value and pay it back in instalments over an extended period, usually several years.
- Property investment: Some individuals may use mortgage loans to invest in real estate for rental income or capital appreciation. By taking a mortgage, they can leverage their investment and potentially achieve higher returns over time.
- Business property purchase: Businesses often require office spaces, warehouses, or commercial properties for their operations. Mortgage loans help businesses acquire these properties without tying up significant capital in one purchase.
- Home improvement: Mortgage loans can also be used for home improvement projects, such as renovations or extensions. Borrowers can use the loan amount to upgrade their property, increasing its value and enhancing their living experience.
- Debt consolidation: In some cases, individuals may use a mortgage loan to consolidate high-interest debts, such as credit card debts or personal loans. By consolidating multiple debts into a single mortgage loan, borrowers can benefit from lower interest rates and more manageable monthly payments.
- Refinancing: Homeowners may opt for mortgage refinancing to take advantage of lower interest rates or to change the loan terms to suit their financial situation better. Refinancing can help reduce monthly payments or shorten the loan term.
Mortgage loan eligibility
The following mentioned are criteria to apply for mortgage loan:
For salaried applicants
- Nationality: Resident of India, with a property in any of the locations where we operate
- Minimum age: 25 years* (18 years for non-financial property owners)
- Maximum age: 85 years* (including non-financial property owners)
*Age of the individual applicant/ co-applicant at the time of loan maturity
*Higher age of co-applicant may be considered up to 95 years basis 2nd generation (legal heir) meeting age norms and to be taken as co-applicant on loan structure - Employment: Should be employed at any private, public or multinational organisation
For self- employed
- Nationality: Resident of India, with a property in any of the locations where we operate
- Minimum age: 25 years* (18 years for non-financial property owners)
- Maximum age: 85 years* (including non-financial property owners)
*Age of the individual applicant/ co-applicant at the time of loan maturity
*Higher age of co-applicant may be considered up to 95 years basis 2nd generation (legal heir) meeting age norms and to be taken as co-applicant on loan structure - Employment: Should be able to establish the required business vintage in the existing venture, along with a steady source of income
Features and benefits of mortgage loan
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Reasonable rate of interest
Starting from 8% to 14% per annum, Bajaj Finserv offers allows you to access a higher loan amount at affordable Mortgage Loan Interest Rate.
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Money in account in 72* hours
No more long waits for mortgage loan amounts with Bajaj Finserv. Find your sanction amount in your bank account in just 72* hours from approval.
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High value funding
Bajaj Finserv provides mortgage loan up to Rs. 10.50 crore* to eligible candidates.
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Digital monitoring
Now keep a close eye on all your mortgage loan developments and EMI schedules through the Bajaj Finserv online platform.
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Long tenor stretch
The Bajaj Finserv mortgage loan tenor stretches up to 15 years allowing borrowers a buffer period to plan out their EMI payments.
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Low contact loans
Experience a truly remote loan application from anywhere in India by applying online and getting an easy approval.
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No prepayment and foreclosure charge
If all borrowers and co-borrowers are individuals, loan availed on floating interest rates, and loan taken for purposes other than business use, then there will be no foreclosure/ part-prepayment charges. However, apart from above situation part pre-payment charges are applicable for term Loan up to 4.72% (inclusive of applicable taxes) of the principal amount of loan prepaid on the date of such part-prepayment. Part pre-payment charges are not applicable for Flexi Term Loan (Flexi Dropline) and Hybrid Flexi.
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Easy balance transfer with top-up loan
Transfer your existing loan to Bajaj Finserv as part of our loan against property balance transfer facility and avail a top-up loan without additional documentation.
How to apply for mortgage loan
Mortgage loan is a reliable financial solution for those who require ample funding. These come with ample funding, nominal interest rates and lengthy tenors to facilitate comfortable repayment. Unlike other secured loans, mortgage loan in India have no spending restrictions. You can use the funds for any financial obligation or expense.
This offering is available to both salaried and self-employed individuals. To know more about the process of availing of a mortgage loan, read on.
- Fill the application form
The first step of the mortgage loan process is to fill the loan application form. Depending on the lender, you may have to do this at a branch or you may be able to fill the form online. Online provisions are generally a lot more convenient and easier to carry out.
Generally, you will have to fill in the following information:
- Personal details
- Employment details
- Income information
- Loan requirements
- Await loan processing
After you submit the application form, the lender will assess your eligibility for the mortgage loan. Based on the eligibility, you will be offered terms or the lender may ask you to add a co-applicant to increase your eligibility.
- Arrange all documents
Upon completing initial loan processing, you must submit the required documentation. Here is a general list of documents required to process the loan.
- KYC
- Property documents
- Income documents
- Await loan verification
Once the documents are submitted, lenders will initiate a technical and legal verification. At this stage, a property evaluation will be conducted and the lender will check the authenticity of the property title. Based on these assessments, the lender will then confirm eligibility and proceed with approval.
At the final step, the lender will issue a sanction letter and you will be able to authorise disbursal based on the approved terms. Do note, you will have to submit all the original property documents to the lender and these will be held until repayment is complete.
With tools like mortgage loan eligibility calculator and mortgage loan EMI calculator, you can manage your loan easily. Read the step-by-step process to know how to apply for mortgage loan.
FAQs about mortgage loan
Bajaj Finserv imposes a nominal processing fee up to 3.54% of the loan amount (inclusive of applicable taxes).
The maximum loan tenure ranges up to 15 years*.
If you have excess funds in hand, you can opt for property loan repayment ahead of the tenure’s end. Bajaj Finserv offers both part-prepayment and foreclosure facilities at nominal to zero charges. No foreclosure charges or part pre-payment charges applicable, if borrowers are individuals, loan availed on floating interest rates and loan taken for purposes other than business use.
The primary meaning of a mortgage loan stands as a loan disbursed against a property as collateral. Thus one needs to provide a collateral or security for mortgage loan.
Co-applicants are co-borrowers for loan against property. A co-owner of a specified property must always be a co-applicant for a loan against that residence. However, financial institutions entertain only specific relatives to co-apply for mortgage loan. Individuals under 18 years cannot be considered co-applicant.
Parents can co-apply for such a loan with their sons or unmarried daughters. Two brothers can also avail credits in such a manner. Similarly, spouses can opt for a joint home loan or loan against property. Nevertheless, some relatives, such as a brother-sister or two sisters, cannot avail joint loans.
Friends are also disqualified from applying for joint mortgage loan. Joint loans lead to hefty benefits, such as enhanced eligibility. Both the borrowers’ credit score and history are considered before loan processing occurs. Additionally, joint property loan also let the applicants avail tax deductions, enabling all the co-borrowers to claim tax benefits on principal repayment and interest payment.
The different types of mortgage loans in India are listed below.
- Loan against property
- Home loan for house purchase or construction
- Loan against property for home renovation
- Loan against property for debt consolidation
- Loan against shop
- Loan against machinery
- Loan against property for marriage
- Loan against property for higher education
The property on which you want to take mortgage loan should be comprehensively insured for an amount not less than the value of the property and it should cover all risks.
No foreclosure charges or part pre-payment charges are applicable, if borrowers are individuals, loan availed on floating interest rates and loan taken for purposes other than business use.
Difference between a mortgage and a reverse mortgage loan are as follows:
- A mortgage loan provides finances against the mortgage of an immovable asset. A reverse mortgage loan provides funds against a residential property’s equity build-up
- The regular mortgage loan can be availed by mortgaging either a residential or a commercial property or machinery. But only a residential property, where the borrower resides, can be used for reverse mortgaging
- Mortgage loans can be availed by all types of borrowers. Reverse mortgages are only meant for senior citizens
- Mortgage loans are repayable over a decided tenor. But under reverse mortgages, no repayment is required until the demise of the borrower or nominee
- Repayment liability under mortgage loans includes the principal plus interest. Under reverse mortgages, repayment liabilities can never exceed the reverse mortgaged property’s value
