When it comes to securing a loan against property, like the one offered by Bajaj Finance, understanding different mortgage types is crucial. Two common types are equitable mortgage and registered mortgage. But what are they, and how do they differ? This article will delve into the details of equitable mortgage vs. registered mortgage and help you make an informed decision.
What is an equitable mortgage?
An equitable mortgage is created by depositing title deeds of the property with the lender. It's a simpler and less expensive process compared to a registered mortgage.
What is a registered mortgage?
A registered mortgage involves the registration of the mortgage deed with the appropriate government authority. It provides greater security to the lender but involves higher costs and a more complex process.
Key differences between equitable mortgage and registered mortgage
- Creation: Equitable mortgage is created by depositing title deeds, while registered mortgage requires registration of the mortgage deed.
- Cost: Equitable mortgage is less expensive than registered mortgage due to lower legal costs.
- Security: Registered mortgage provides greater security to the lender.
- Process: The process for creating an equitable mortgage is simpler than that for a registered mortgage.
- Enforcement: In case of default, enforcing a registered mortgage is easier than an equitable mortgage.
Pros and cons of equitable mortgage
Pros |
Cons |
Lower costs |
Less secure for the lender |
Simpler process |
More difficult to enforce in case of default |
Faster to set up |
May not be accepted by all lenders |
No government registration required |
Risk of fraud due to lack of official record |
Lower legal fees |
May have higher interest rates due to increased risk |
Pros and cons of registered mortgage
Pros |
Cons |
Greater security for the lender |
Higher costs |
Easier to enforce in case of default |
More complex process |
Official record of the mortgage |
Longer to set up due to registration process |
Accepted by all lenders |
Higher legal fees due to registration |
Typically lower interest rates due to decreased risk |
Requires more documentation |
Legal implications and documentation for equitable mortgage
Equitable mortgage is governed by the Transfer of Property Act, 1882. The key document is the title deed of the property, which is deposited with the lender.
Legal implications and documentation for registered mortgage
Registered mortgage is also governed by the Transfer of Property Act, 1882. However, it requires a mortgage deed that needs to be registered with the government authority.
Understanding the differences between an equitable mortgage and a registered mortgage is crucial. Equally important is considering how you can leverage your property beyond these traditional frameworks. This is where a Bajaj Finserv Loan Against Property comes into play.
Whether you need to expand your business or fund a dream vacation, a loan against property from Bajaj Finserv helps you do just that. This unique financial solution offers:
- Substantial loan amounts of up to Rs. 10.50 crore*
- Competitive loan against property interest rates
- Long loan against property repayment tenures of up to 15 years*
- Easy loan against property or LAP online application process
- Quick disbursal within 72 hours* of approval
Remember, your choice between equitable mortgage vs. registered mortgage will depend on your specific needs and circumstances. And when it comes to making the most of the value of your property, consider depending on Bajaj Finserv Loan Against Property.
