Types of Mortgage Loans: Which Is Best for You
16 May 2022
Table of Content
Emergencies are unpredictable, especially financial ones. Sometimes these expenses can be too high to seek financial aid from friends and family. In such times, you can make your idle assets work for you. If you own assets like properties, you can get a loan against them. You can mortgage them as collateral with your lender and avail loan. Read on to understand what a mortgage loan is and the various types of Mortgage Loans.
What is a Mortgage Loan?
A Mortgage Loan is a type of secured loan, wherein you can mortgage immovable properties as collateral and receive a loan against them. The loan amount is usually around 60% of the current realizable value of the assets subject to fulfilment of income criteria of the lender. Failure in repaying the loan amount will result in the lender selling off the charged collateral to recover the dues. Nevertheless, Mortgage Loans are convenient as you can make idle assets generate funds for you.
Mortgage Loan Types
Let us now look at the various Types of Mortgage Loans available in India
Loan Against Residential Property
You can obtain a loan against property in India, i.e., your home or a piece of land you own. A prominent benefit of Loan Against Residential Property is high-value loan amounts. Depending on your eligibility, the lender may offer you loan after deducting margin as their norms on the value of property offered as security. Interest rates, too, are relatively lower as these are secured loans. The loan amount can be utilised to fund any personal or business ventures except for financial speculation of any nature. Until you repay the loan, charge of lender remains on the residential property, and the lender has the right to sell the property to recover its dues in case of default in repayment of loan.
Loan Against Commercial Property
If you own a commercial property such as shops, warehouses, land for commercial uses, etc., you can mortgage them to avail funds as required. You could be a self-employed individual like a doctor, lawyer, trader, contractor, etc., owning a commercial space that you can mortgage to finance big budget expenses. This type of loan is also known as a real estate loan. Higher principal loan amounts and longer repayment tenures are some of the salient features of this type of Mortgage Loan in India.
Bank of Baroda Mortgage Loan Benefits
With so many mortgage loan types and benefits, you can seamlessly and effortlessly obtain a loan whenever you need. At Bank of Baroda, we offer Mortgage Loans, thus enabling you to get quick access to cash. With our flexible repayment tenures and attractive interest rates, you can enjoy several
Mortgage Loans benefits.
- Higher loan amount limit: Bank of Baroda offers up to INR 10 Cr as mortgage loan amount in metro cities.
- Demand loan or overdraft: Meet your short-term financial goals as Bank of Baroda enables you to opt for a demand loan or an overdraft facility.
- Save interest by depositing surplus money: You can make prepayment in loan account and reduce the total interest on the mortgaged property.
- Competitive interest rates: We offer attractive interest rates on Mortgage Loans – lower than or at par with our competitors.
- Generate income on idle properties: Bank of Baroda’s real estate loans can be an excellent source for raising the funds for any purpose except for financial speculation.
Investing in real estate comes with numerous perks, an important one being the ability to convert it into a source of fund raising at the time of need. With different types of mortgage loans available, you can mortgage your property as security and get funds to finance your personal or business needs.
Bank of Baroda’s mortgage loans are flexible; they come with attractive interest rates and offer a higher loan amount limit depending on location. Need a mortgage loan? Call our toll-free number 1800 258 44 55 / 1800 102 44 55 or head to your nearest branch and let one of our executives assist you.
* Mortgage loan approval is subject to Bank’s prevailing policy guidelines.
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The contents of this article/infographic/picture/video are meant solely for information purposes and do not necessarily reflect the views of Bank of Baroda. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Bank of Baroda and/ or its Affiliates and its subsidiaries make no representation as to the accuracy; completeness or reliability of any information contained herein or otherwise provided and hereby disclaim any liability with regard to the same. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Bank of Baroda or its affiliates to any licensing or registration requirements. Bank of Baroda shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.
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Motorcycles are the primary means of transportation in a vast majority of Indian households. Two wheelers also make it easier to manoeuver India’s busy streets very quickly. Hence, India is among the top 4 largest motorcycles markets across the world
What's the Difference Between a Gold Loan and a Loan Against Property?
Loans are one of the best ways to access funds in an emergency or to pursue your goals. There are broadly two types of loans that you can procure - a secured loan and an unsecured loan. If you offer collateral to the lender in exchange for the loan, you
are said to have taken a secured loan. Many people prefer to take a secured loan as it helps them receive funds on suitable loan terms and conditions such as lower interest rates and higher loan amounts. When offering a secured loan, lenders usually
accept gold, securities, property, and other similar assets as collateral. Out of all these types, a loan against gold and a loan against property are the two most common types of secured loans.
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