Exploring the Different Types of Mortgages Available

You will find different types of Mortgage Loans in India. You must be familiar with a conventional Home Loan. It financially helps you to purchase a residential or commercial property. The property remains as collateral with the loan provider until you repay the borrowed amount with interest. However, Mortgage Loans have several other variations. Here’s a look at a few of them.

Working of a Mortgage Loan

People often borrow a Mortgage Loan against a property they already own. When they apply for a loan, the loan company evaluates the property’s value to determine the loan amount. Reputable loan companies like Hero FinCorp offer a loan-to-value ratio of up to 75%. That means they offer a loan of up to Rs. 75 Lakh against a property worth Rs. 1 Crore. However, the loan applicant must fulfil the eligibility conditions set by the lending institution. The loan company demands a few documents to decide the final loan amount.

Different Types of Mortgage Loans In India

If you plan to borrow a Mortgage Loan in India, you must know its different types. Each type differs in conditions. So, you must choose one that suits your specific situation. Different types of Mortgage Loans include the following:

• Simple Mortgage: Pledge a property you own as collateral to borrow a loan against its value. However, you may retain its possession and continue living in it. No property transfer takes place in this type of Property Loan. However, you must evacuate the property if you default. In that case, the loan provider can legally sell the property. They can deduct their balance from the sale amount and hand over the remaining amount to you. It is also called a registered mortgage because it is registered with the government.
• Mortgage by Conditional Sale: To borrow a Mortgage Loan by conditional sale, you may sell a property to the loan company. However, it has one condition. The sale becomes absolute only if you fail to repay the loan by a specific date. Upon successful repayment, the sale becomes void. In this condition, the loan provider transfers it back to you. 
• Usufructuary Mortgage: In this type of mortgage, you must transfer the property’s possession to a loan company. That means you have to evacuate the property to borrow the loan. In turn, the loan provider possesses the collateral property for income generation. Finally, it adjusts the generated income in the loan amount. You will get back the property’s possession after full repayment.
• English Mortgage: In this type of mortgage, you must transfer the property’s ownership to the loan provider. They possess the property if you fail to repay the loan by the due date. During this duration, you must rent the property to continue using it. After complete repayment, the loan company will transfer the property to you.
• Equitable Mortgage: A Mortgage Loan by title deed deposit is also called a Mortgage Loan. You must deposit your property’s documents to borrow this loan type. It does not require any registration. The primary objective is to create security for the loan company. It becomes easier for them to recover their loan amount.
• Anomalous Mortgage: A Property Loan deal that does not fall under any of these types of Mortgage Loans is termed an anomalous mortgage. It often includes customised loan plans and can be a combination of other Mortgage Loan types.

Comparing Different Types of Mortgage Loans

Begin the comparison by evaluating your preferences. The most important factors to consider include the interest rates and loan terms. Research to evaluate the various options available. Check their eligibility criteria to ensure qualification. Take professional help to decide the mortgage type most suitable to your needs. 

How to Apply for a Mortgage Loan?

• Check the eligibility criteria.
• Prepare the necessary documents.
• Choose a repayment plan with budget-friendly instalments.
• Fill out an online application form.
• Click ‘Apply Now’.

Understanding the different types of Mortgage Loans is necessary to choose the best option. Each loan type has plus and minus points. You must choose one most suitable to your funding requirements. At Hero FinCorp, you can make an informed decision to find a perfect fit. Here, you can get a Mortgage Loan of up to Rs. 7.5 Crore. The final loan amount depends on your financial needs and property value.