Mortgage Loan: Everything You Need to Know

Are you considering buying a new home or investing in real estate? If so, chances are you’ve heard the term “mortgage loan” thrown around quite a bit. In this comprehensive guide, we will delve into the world of mortgage loans, exploring what they are, how they work, and the various types available to borrowers.

What is a Mortgage Loan?

A mortgage loan, in its simplest form, is a loan provided by a financial institution or lender to help individuals and families finance the purchase of a home or property. The loan is secured by the property itself, meaning that if the borrower fails to repay the loan, the lender has the right to take possession of the property and sell it to recoup their investment.

How Does a Mortgage Loan Work?

When you take out a mortgage loan, you are essentially borrowing a large sum of money to purchase a property. The loan is typically repaid over a fixed period of time, often ranging from 15 to 30 years, through monthly mortgage payments. These payments consist of both principal (the amount borrowed) and interest (the cost of borrowing the money). The interest rate on the loan can be fixed or adjustable, depending on the terms of the mortgage agreement.

Types of Mortgage Loans

There are several types of mortgage loans available to borrowers, each with its own set of advantages and considerations. Let’s explore some of the most common types:

Conventional Mortgage Loan

A conventional mortgage loan is a loan that is not insured or guaranteed by a government agency, such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA). These loans typically require a higher down payment and have stricter qualification criteria compared to government-backed loans.

FHA Loan

An FHA loan is a mortgage loan insured by the Federal Housing Administration. These loans are popular among first-time homebuyers and individuals with lower credit scores, as they often require a lower down payment and have more lenient qualification requirements.

VA Loan

A VA loan is a mortgage loan guaranteed by the Department of Veterans Affairs. These loans are available to eligible veterans, active-duty service members, and surviving spouses. VA loans often offer competitive interest rates and require no down payment.

Applying for a Mortgage Loan

Now that we have a basic understanding of mortgage loans and their types, let’s dive into the process of applying for a mortgage loan. Applying for a mortgage can be a complex and time-consuming process, but with the right knowledge and preparation, you can increase your chances of securing a loan on favorable terms.

Check Your Credit Score

Your credit score plays a crucial role in determining your eligibility for a mortgage loan and the interest rate you will be offered. Before applying for a loan, it’s essential to review your credit report and address any errors or discrepancies. Additionally, taking steps to improve your credit score, such as paying off debts and making payments on time, can help you secure a more favorable loan.

Gather Required Documents

When applying for a mortgage loan, you will need to provide various documents to verify your income, assets, and identity. These may include pay stubs, tax returns, bank statements, and identification documents. It’s important to gather these documents in advance to expedite the application process.

Shop Around for Lenders

Not all lenders offer the same terms and interest rates, so it’s crucial to shop around and compare offers from multiple lenders. Consider reaching out to banks, credit unions, and mortgage brokers to find the best loan options for your needs. Be sure to compare not only interest rates but also closing costs and any additional fees associated with the loan.

Get Pre-Approved

Getting pre-approved for a mortgage loan can give you a clear understanding of how much you can afford to borrow and can make you a more competitive buyer in the real estate market. During the pre-approval process, the lender will evaluate your financial information and provide you with a pre-approval letter stating the loan amount for which you are eligible.

Complete the Application

Once you have selected a lender and found the right loan for your needs, it’s time to complete the mortgage loan application. The application will require detailed information about your personal and financial situation, including employment history, income, and assets. Be prepared to provide accurate and up-to-date information to ensure a smooth application process.

Underwriting and Closing

After you submit your mortgage loan application, the lender will begin the underwriting process. This involves reviewing your application, verifying your information, and assessing your creditworthiness. If everything goes well, the lender will issue a loan commitment letter, stating their intent to fund the loan. Finally, you’ll attend the closing, where you’ll sign the necessary documents and officially become a homeowner.

Frequently Asked Questions (FAQs)

1. Can I get a mortgage loan with bad credit?

Ans. Yes, it’s possible to get a mortgage loan with bad credit. However, borrowers with lower credit scores may face higher interest rates and stricter qualification requirements. FHA loans and other government-backed programs are often more lenient towards borrowers with less-than-perfect credit.

2. How much do I need for a down payment?

Ans. The down payment required for a mortgage loan varies depending on the type of loan and the lender’s requirements. Conventional loans typically require a down payment of at least 3% to 20% of the purchase price, while FHA loans may require as little as 3.5% down.

3. What is the difference between a fixed-rate and an adjustable-rate mortgage?

Ans. A fixed-rate mortgage has an interest rate that remains constant throughout the life of the loan, providing stability and predictable monthly payments. An adjustable-rate mortgage (ARM), on the other hand, has an interest rate that can fluctuate over time based on market conditions. ARMs often have an initial fixed-rate period, after which the rate adjusts periodically.

4. Can I pay off my mortgage loan early?

Ans. Yes, you can typically pay off your mortgage loan early. However, it’s important to review your loan agreement and consult with your lender to understand any prepayment penalties or fees that may apply. Paying off your mortgage early can save you interest costs over the long term.

5. Should I refinance my mortgage?

Ans. Refinancing your mortgage can be a smart financial move if it allows you to secure a lower interest rate, reduce your monthly payments, or access equity in your home. However, it’s essential to carefully evaluate the costs and benefits of refinancing and consider your long-term financial goals.

6. What happens if I can’t make my mortgage payments?

Ans. If you find yourself unable to make your mortgage payments, it’s crucial to contact your lender immediately. Depending on your circumstances, options such as loan modification, forbearance, or a repayment plan may be available to help you avoid foreclosure. Open communication with your lender is key to finding a solution that works for both parties.

Conclusion

Securing a mortgage loan is a significant financial decision that requires careful consideration and planning. By understanding the different types of mortgage loans, the application process, and your rights and responsibilities as a borrower, you can navigate the mortgage landscape with confidence. Remember to shop around for lenders, review your credit score, and gather the necessary documents to position yourself for success. With the right knowledge and preparation, you’ll be well on your way to achieving your home ownership or real estate investment goals.

Why Compare Mortgage Loan Rates Before Applying

Business man hand hold the house model saving small house

To get the best deals on a mortgage loan, it’s vital to research and compare the interest rates because they tend to change after a set period. So read this article to get updated information on 2023 mortgage rates to make the best decision by opting for a fixed or floating interest rate.

Why compare mortgage loan rates?

Shopping multiple quotes from multiple lenders allows you to get the lowest possible mortgage loan rates. For instance, you can save up to INR 25000 a year, or INR 735000, over a 30-year mortgage. Nevertheless, since no two lenders are the same, comparing the loan offers lets you know in detail about every offer, rate, and term, helping you make the right decision. Also, compare the additional costs, APRs, and other loan terms from the financial institution.

Mortgage interest rate 2023

Unlike home loan interest rates, mortgage loan rates are higher and constantly change depending on various factors. In January 2023, the mortgage rates were proposed to start from 9.00% onwards with partial or complete pre-payments to reduce the loan term (either 15 or 20 years) or EMI. However, it differs across NBFCs based on your profile, income, the need for the loan amount, tenure, credit score and history, and additional factors.

Conclusion

So, it’s time to begin the search and apply for a mortgage loan suiting your budget and goals.

Just go to the lender’s website to get all the related information, apply in just a few simple steps and get your loan approved.

Must Read: Tips to Get the Best Mortgage Loan Possible

How Does Each Factor in the Mortgage Calculator Affect Your EMIs?

A Mortgage Loan allows asset owners to borrow credit against their residential, commercial, or industrial property. They can pledge their property as collateral and get a loan against it. However, assessing the monthly installments is crucial before applying for a Loan Against Property, as it affects the monthly budget and repayment consistency.

A mortgage calculator estimates the monthly EMI based on three variables: loan amount, interest rate, and repayment term. Here, we will understand how each factor affects the loan EMIs.

Mortgage Amount: A higher mortgage amount results in bigger monthly EMIs. Therefore, although lending institutions approve loan amounts based on the property valuation, applicants must only borrow the required amount. Choosing a manageable loan amount prevents unnecessary financial burdens on the borrower’s monthly budget.

Interest Rate: Mortgage loan rates vary based on the lender’s policy and the applicant’s financial condition, credit rating, and other factors. A higher interest rate results in bigger EMIs. Therefore, pick the lender carefully and ensure getting the lowest interest rates suitable to your repayment capacity.

Repayment Tenure: There is no perfect tenure for all Mortgage Loan applicants. Some people choose a longer term to keep EMIs smaller, while others prefer bigger EMIs to pay off the loan sooner. Picking a suitable loan tenure ensures that the borrowers do not default on the loan due to a financial crunch.

Thankfully, mortgage loans offer excellent flexibility during repayment, ranging from a few months to several years. Picking the correct loan term using a mortgage calculator ensures timely repayment and lowers any chance of loan default.

Also Read: 8 Situations in Which You Should Never Refinance Your Mortgage

Get The Best Mortgage Loan Successfully Following 3 Steps

If you are finding it hard to get the best mortgage, here are the initial three steps to set yourself up for getting the best mortgage loan.

Pullout Your Credit Reports: Before accessing a mortgage application, a loan seeker should check their credit reports. You need to ensure that there is no mistake in your credit report as it can reduce your credit score unnecessarily. Credit history plays a crucial role in getting a good deal on a mortgage loan. You can pull your credit report for free once a year from the CIBIL credit bureau.

Improve Your Credit Score: An individual should improve their credit score before applying for a loan, as mortgage loan interest rates in India depend on the creditworthiness of the borrower greatly. Generally, a lender prefers a credit score of 700 to approve a loan. However, it is a mortgage loan; they can also approve your loan at a lower score. You should pay your credit card bills and previous loan EMIs on time to improve your credit score. Also, if you find a mistake in your credit report, submit a request to improve it as soon as possible.

Calculate how much EMI you can afford: Before you start filling out your loan application, check how much EMI you can afford to pay. Use the calculator provided by the lender to calculate eligibility and EMIs o a loan beforehand.

The lender may ask for your ongoing loans or existing debts. You can compare different property mortgage loan offers with different lenders. Most individuals prefer trusted NBFCs to get a loan at an affordable rate.

Must Read: 7 Steps To Get Successful Approval on mortgage loan

What are the Methods for Quickly Repaying a Mortgage Loan?

istockphoto-934521186-612x612

Paying off a loan quickly can help individuals save money on interest payments and give them a sense of satisfaction when they realize that they have paid the entire amount.

If you aim for a rapid payoff of mortgage property loan, here are some methods:

Opt for a shorter-term period loan:

A shorter repayment duration results in greater monthly payments but lower interest over the loan’s lifetime. As a result, the borrower will be able to repay the loan fast.

With Fullerton India, getting a mortgage loan is quick and seamless, with competitive pricing, minimal documentation, flexible repayment tenures, and easy to meet loan against property eligibility.

Whenever possible, make additional payments:

Making extra payments to the lender is necessary to pay off the loan before the specified date. Other than the monthly EMI, these are payments borrowers make to the lender.

However, check with the lender to see whether there is a cost for making an early repayment and adjust payments accordingly.

Do not miss EMIs:

Another essential thing is that borrowers should not miss EMI payments to ensure the mortgage loan is paid quickly.

Further, lenders often charge a penalty if the borrowers miss an EMI payment, which raises the overall cost of the loan.

Before taking a mortgage loan, borrowers can also compute EMIs on the EMI calculator to know what EMIs they might have to pay in the future. This will help them in checking the loan’s affordability.

Make a higher down payment:

Moreover, if possible, make a higher down payment and opt for a loan with high monthly payments to ensure that the loan is paid off quickly.

Additional Read: 5 Mistakes to Avoid When Taking A Loan Against Property

7 Easy Steps to Get a Mortgage Loan

A Mortgage loan is one of the most preferred options to arrange finance in times of need. With a mortgage loan, you can arrange financial assistance without having to sell off your valuable property. There are multiple reasons why mortgage loan or loan against property is so popular, like:

low mortgage loan interest rates as it is a secured loan,
freedom to continue using your property even while it is mortgaged,
freedom to use the loan amount unrestricted,
and a high Loan To Value.

7 Easy Steps to Get a Mortgage Loan

With a leading lender like Fullerton India, you can get a mortgage loan in these easy steps:

Visit Fullerton India’s website and click on the ‘Apply now’ option. Select ‘Loan Against Property’ and choose if you are a salaried person or are self-employed.
Fill out the online form, enter a valid mobile number, and put in the OTP details.
Enter your personal details in the loan application form.
Put in the details of your employment and your bank details.
Scan your documents and upload them.
Click ‘Submit’ and your eligibility will be confirmed within a few minutes.
If you are eligible, a customer care executive will call you up and take you through the further process.

With these easy steps, you can quickly get a mortgage loan at low mortgage loan interest rates from Fullerton India. Furthermore, if you are already a Fullerton India customer, you have a high probability of being eligible for the unique Emergency Credit Line Guarantee Scheme.

Also Read: Follow These 7 Steps To Get A Mortgage Loan

Are You Eligible for Home Mortgage Loans?

istockphoto-1001168084-612x612

A mortgage loan is a type of secured business or personal loan in which you use your real estate assets as collateral. If you want to get a mortgage loan, you need to first check if you are eligible for it.

Let’s discuss the eligibility criteria for home mortgage loans.

For Salaried Individuals

Age: 18-70 years

Monthly Income: INR 25000 per month (net monthly income of the salaried co-applicants)

Loan Tenure: Up to 20 years

Interest Rate: Up to 12%

Employment History: Minimum proven work experience of three years

Type of Property: Industrial, residential, or commercial

Loan-to-Value (LTV): Up to 80% of the property value

CIBIL Score: Over 650

For Self-Employed Individuals

Age: 18-70 years

Income: INR 3 lakh per annum or above

Loan Tenure: Up to 20 years

Interest Rate: Up to 12%

Employment History: Business existence of at least five years and ITR of at least three years

Type of Property: Industrial, residential, or commercial

LTV: Up to 80%

CIBIL Score: Over 650

Documents Required for Home Mortgage Loans

Salaried Individuals:

Latest salary slips
Bank account statements of the last three months
Aadhar card/PAN card
Address proof
Copy of property documents
IT returns

Self-Employed Individuals:

Bank account statements of the last six months
Aadhaar/PAN card
Address proof
Copy of property documents

Conclusion

You can use the above information to check your loan against property eligibility. Also, please note that different lenders may have different eligibility criteria for home mortgage loans. Hence, be sure to check the requirements with your lender.

Additional Read: How Many Types of Mortgage Loans Available in India?

How to Select the Perfect Property Mortgage Loan?

istockphoto-1019219898-612x612

Choosing the right property loan

Choosing the right property loan is one of the first steps in the home buying process. You must select a home loan that offers competitive mortgage loan rates, low operational costs, and flexibility to prepay.

Let’s look at three factors to consider for choosing the best mortgage loan.

Fixed vs. Floating Mortgage Loan Rates

Mortgage loan rates are of two types: fixed (that stay the same throughout the loan tenure) and floating (that changes throughout the tenure as per market conditions). Even though floating rates may seem tempting, fixed interest rates have proven to be more advantageous.

External Benchmarks

The benchmark rate is the lowest interest rate at which a lender can provide a loan to a consumer. The benchmark rate aligns with the repo rate set by the RBI. It’s wise to choose a lender that has linked its loan rates to the repo rate. This way, you can stay assured you’ll receive the best mortgage loan rates.

Loan Tenure

Selecting a suitable loan tenure is as crucial as choosing an ideal lender. Longer loan tenure is a better pick because you can get a higher loan amount and a low interest. Moreover, your cash inflow will increase as years pass by, enabling you to prepay your loan and reduce the interest outgo.

Wrap Up

Choosing the right property mortgage loan is an essential aspect of buying a home. When searching for lenders, look beyond the interest rate and evaluate other operational costs and quality of service to make the best selection.

Additional Read: Fixed vs Adjustable Mortgage Loan Rates: How to choose the right for your need?

Mortgage Loans: How to Get the Best Loan Against Land?

istockphoto-1019219898-612x612

A mortgage is a secured loan you get by using your property as collateral. If you want to buy a new property, the collateral is the property itself. There are various types of mortgages, such as a simple mortgage, usufructuary mortgage, mortgage by conditional sale, and mortgage by title deed deposit.

You’re all set to apply for a mortgage loan. But before it consider these factors to get the best loan against land.

Improve Your Credit Score

The credit score is a crucial factor in the approval process of a mortgage loan. A healthy credit score will increase your chances of getting a good mortgage with low-interest rates. Making your debt payments on time and avoiding major purchases on credit are some ways to improve your credit score.

Determine Your Budget

Next, calculate your budget and decide on a loan amount accordingly. The 28/36 rule works well here. Ideally, your mortgage payments and other front-end debt obligations shouldn’t exceed 28% of your monthly income. The back-end debt obligations shouldn’t exceed 36%.

Shop for the Best Mortgage Loan Interest Rates

Once you know the loan amount you need, look for the best mortgage loan interest rates. Most Indian lenders charge an 8.15%-11.80% interest rate. Borrowers can opt for fixed or variable interest rates. Fixed interest rates remain constant throughout the mortgage period, while variable rates fluctuate as per market conditions.

Get Pre-Approved

The final step is to get pre-approved, as this will speed up the mortgage process. Get your paperwork together, including income proof, asset proof, list of liabilities, and other additional paperwork.

Must Read: Apply for Mortgage Loans in a Few Simple Steps

Complete Guide To Using The Mortgage Loan EMI Calculator

what-determines-property-loan-approval

One of the most common reasons for saving on finance all throughout the years is to acquire a home or house. However, the whole process of obtaining a loan against a mortgage can prove to be a very time-consuming task and often requires evaluating alternative options and factors.

But today, with the help of the mortgage loan EMI calculator, the whole process of selecting the best possible loan for your house is a quick and straightforward task. Here is your detailed guide to calculating the EMI for choosing the best viable option of loans for your home. (Calculate your Mortgage Loan EMI)

Steps To Calculate Your Through Mortgage Loan EMI Calculator

The steps listed below will help you calculate your EMI account against the loan taken.

Step 1: Determination of Loan Amount

In the first step, you need to determine the amount of loan you wish to take as a loan to meet your requirements. The maximum limit for such loans is fixed at Rs. 10 crores.

Step 2: Choosing the Period

In the second step, the period for which the loan will be taken must be determined. It must be done according to the time you will gather funds to repay the principal amount with interest.

Step 3: Rate of Interest

In this step, you will need to determine the interest rate charged permanently on the loan amount. The interest rate on such loans is not fixed and varies from time to time.

Step 4: Calculation of EMI

In the last step, the EMI is calculated against the entered mortgage loan amount, period, and interest rate.

Must Read: What are the 4 Basics of Qualifying for a Mortgage Loan?

Top Tips to Prepare for A Mortgage Loan

istockphoto-932278678-612x612

Mortgage loan is also like any other loan which we take against any kind of security. That is, if we take a loan by mortgaging the house or property, then it is called mortgage loan.

Tips to Prepare for A Mortgage Loan

Check Your Credit Scores

The first thing one needs to monitor when preparing for a mortgage loan is the CIBIL score. A high credit history with scores greater than 750 will prove your credibility. Get your scores in advance, check for their accuracy, and make your credit payments as regular as possible.

Do Thorough Research

Research the loan interest, the amount sanctioned by lenders etc., before you apply for loans. Applying for loans with multiple lenders will affect your CIBIL score. Hence do good homework and zero down on the best lender who offers you better rates and terms.

Be Realistic

Use the lender’s mortgage loan EMI calculator to calculate the monthly instalments that suit your budget and the interest you will be paying for it to get a better idea and plan your finances accordingly. Choose a realistic instalment and evaluate your finances so that it doesn’t affect your credit scores for the future.

Look For Flexible Repayment Options

A mortgage loan is a long-term loan as it involves a higher sum. There are times you want to end your 15-year mortgage loan when your finances improve. Hence look for lenders who allow prepayment without any extra charges.

Choose A Trustworthy Lender

The hard inquiry that lenders make will reflect on your credit report; hence, applying for several mortgage loans together will eventually affect your CIBIL score and the loan sanctions everywhere. Hence zero down on one lender using their digital platforms and go for it.

Fullerton India offers mortgage loans up to 12.5 crores based on the asset value pledged. We offer affordable lap interest rates from 9% and a flexible tenure of up to 15 years. Apply now!

Additional Read: Guide to Unlock the Best Mortgage Loan for You

What are the Key Benefits of a Mortgage Loan?

what-determines-property-loan-approval

A land mortgage loan or a loan against property (LAP) is a type of loan that you can avail of against the value of your property. The loan amount that you can avail of depends on the value of your property in the market. Generally, financial institutions offer up to 60% to 70% of your property’s value as a loan.

Compared to other secured loans, the property loan interest rates are lower and most affordable. However, it is worth noting that if you wish to secure a lower property loan interest rate, you will have to convince your lender that you have a stable income, a healthy credit score, and no current financial obligations.

A mortgage loan comes with various benefits that you can avail of while applying for a loan:

It serves multiple purposes, which means you can take a loan against property to cover the cost of a medical emergency, education, wedding, international travels, car repair, home renovation, etc.
Some lenders may even offer lower to no prepayment charges. So, if you wish to prepay your loan, check with your lender if they have such a benefit included in the loan agreement.
The process of applying for a loan against a property is simple and easy.
Unlike unsecured loans, you can opt for a loan tenure of up to 15 years.
Since the loan tenure is longer, it significantly brings down your monthly. It is suitable for people who can not afford higher EMIs. However, if you have the budget, choose a shorter tenure to reduce the total of borrowing.

Must Read: Understand the difference between Loan and Mortgage

Questions To Ask Mortgage Lenders

loan-against-property-1024x410

Are you thinking about taking a mortgage loan, well it may be tough if it is your first time. For such situations, these are some questions that you can ask your lender.

Questions to Ask Mortgage Lenders

What is the type of mortgage loan?

The first question would be the types of mortgage loan that the lender is offering. There are different kinds of mortgage loan like:

Loan against Property
Home loan
Leasing loan

Based on your requirement you can choose the one that fulfils your expenses.

How much can I borrow?

Once you know the loan, the second question would be the loan amount that you can borrow. Normally, if you are opting for a home loan, the loan is offered for close to 80% of the price of the property. 20% of the price has to be paid by the borrower from his/her savings

What is the mortgage loan interest rate?

You must never shy away from asking the lender the interest rate at which the loan is offered. For different lenders, the rate may vary, so it is important to ask this question and then make the right decision about the lender you want to choose.

What does the final closing cost?

If you are thinking that the principal amount is all you have to pay, then you might be wrong. The closing cost will include loan-origination fees, appraisal fees and attorney fees (if any), and many more. So, make sure to ask your ender this.

Conclusion

These are some questions that will help you understand the mortgage loan better. It will also help you in making the right financial choice for buying your house.

Must Read: A Complete Guide about What Is a Mortgage Loan and how to get?

How Much Mortgage Loan Can I Get?

loan-against-property-1024x410

It happens that sometimes there is a sudden need for money, we get the idea of taking a loan. But which type of loan is suitable at that time is a big issue. If you live in your house and you need money for some work, then you can take a loan by mortgaging that house with financial institutions. This type of loan is known as a mortgage loan.

Factors affecting mortgage loan eligibility:

Applicant’s Age- One of the critical factors for a mortgage loan is age, which the lender considers before deciding your mortgage loan amount. As the mortgage loan is taken for longer periods, so it is necessary to get into the position early to pounce on the opportunity
Income- Income is also an important factor. While there is no specific income criteria, a reasonably good source of income will get you a mortgage loan.
Down Payment- Normally every lender offers a mortgage loan which is 70-80% of the property value. So, make sure you have got your down payment covered.
Property Location- The location of your property also determines your mortgage loan amount. A property in the positive list of lenders to get hassle-free loan approval.

How much loan can I get?

While various factors influence the mortgage loan, however, the final loan amount will be the financial institution’s decision solely. For all the details you can call or visit the nearby financial institution’s branch and get all your queries and complaints resolved at the earliest.

Additional Read: 4 Things to Know Before You Get a Mortgage Loan

5 Ways In Which Mortgage Loan Benefits Veterans

what-determines-property-loan-approval

Veterans are individuals who deserve respect and all the applause for their service to the nation. If you are a veteran who is looking for a loan, then there is good news you can now avail mortgage loan which comes with unique benefits making it easy for you to get keys for your dream house. Let us learn about the benefits exclusive that veterans enjoy with Mortgage loan.

Benefits of Mortgage loan for benefits

No Down Payment

One of the things individuals struggle with before buying a house is saving for a down payment. While the option for zero down payment was earlier available for all, however now things have changed, but not for veterans. With no necessity for a down payment, you do not have to take money out from your savings or retirement emergency fund. You can also use your savings for repairs and renovation later.

No Private Mortgage Insurance

For lenders who cannot give 20 percent of the quote home price, have to get private mortgage insurance added to the total loan amount, for the risk of the loan being defaulted. However, with the veteran mortgage loan, as the federal government backs the loan, the risk is eliminated.

Basic Allowance for housing

The veterans are offered a basic allowance for housing, which can be counted as a source of income. This allowance can also be used for making the mortgage payment.

Better Interest rate

Apart from the above-mentioned benefits, veterans also enjoy favorable mortgage loan interest rates. Due to the government backing on these loans, the risk of failure is low, which is why lenders charge lesser interest rate of Mortgage Loan for veterans.

With so many benefits, for veterans building a dream house is easy and simple. If you too are a veteran then you can now visit your nearest lender, or apply online for a Mortgage Loan and get all the above benefits.

Must Read: 5 Types of Mortgage for Homebuyers: Which One is Best for You?

How does Mortgage Loan Balance Transfer work?

what-determines-property-loan-approval

Regardless of the loan you take, balance transfer is one of the more rewarding approaches that can minimize your interest-centric liabilities. However, for balance transfer to work perfectly, you need to understand the process in its entirety and make adjustments to your existing loan structure, accordingly.

Why balance transfer is important?

The concept of balance transfer allows you to shift the existing loan to another lender that offers lower interest rates. Therefore, with balance transfer to rely on, you can easily lower your accruing interests by a significant margin. Moreover, balance transfer allows you to correct your indecision regarding a mortgage loan where you might have persisted with a lender, quoting higher interest rates.

Balance transfer allows you to shift the outstanding amount of the existing loan to a lender that allows you to enjoy the perks of a lower mortgage loan interest rate. This process ensures that your loan liability goes down significantly, which can then be converted into affordable easy monthly installments.

When to opt for Balance transfer?

Firstly, you should never opt for balance transfer if your loan tenure is about to end as the minor perks of saving some money are outweighed by the penalties and fines procured by the existing lender. In case you have started off with the loan repayment process and stumbled across a lender that offers lower rates, balance transfer during the initial phase is extremely lucrative and beneficial.

Then again, you need to consider the additional charges, resubmission of documents, and balance transfer fees into account before making the final call.

Must Read: How to Secure a Mortgage Loan in 6 Easy Steps

FAQs:

How much of a mortgage loan can I qualify for?

What are the factors when getting a mortgage loan?

Is a loan against property the same as a mortgage loan?

How to Get the Best Deals on your Mortgage Loans?

Mortgage Loan (LAP)

Mortgage loans are the ones that allow you to get a sizable credit line for collateral. However, every loan isn’t the same as you need to keep an open mind for getting the best deals in the existing lending space.

In the subsequent sections, we shall take a look at the best possible strategies for helping you save money on a mortgage loan. Here is a list:

Check These to Get the Best Deals on your Mortgage Loans:

Compare Deals and Offers

Comparing different mortgage loans is the best possible way to get a good deal. You need to compare different lenders and must go with the one offering the best rates, lowest processing fees, and minimal overheads.

Best Interest Rates

It is important to choose well and eventually go with the best mortgage interest rates, to save some money on the payments. A competitive interest rate ensures that you need not pay a hefty cumulative sum by the end of the tenure.

Seamless Restructuring

A good lender is the one that offers flexible repayment options, especially when loan restructuring is concerned. For instance, if you are planning to get a car loan, you can choose the tenure as per your existing financial standing. Every lender offers a mortgage loan EMI calculator to make repayment structuring easier for the borrowers.

In addition to these, it is necessary to maintain a healthy CIBIL score to qualify for better and low-interest loans. Therefore, if you want to save money on mortgage payments, it is crucial to fix your credit history, beforehand.

Must Read: 6 Steps of the Mortgage Loan Process Explained