A Mortgage loan is a secured loan product and it is secured by the collateral of specified real estate property that the borrower is indebted to pay back within a predetermined set of regular monthly payments. Mortgage Loan are mostly used for any kind of working capital requirement, purchasing any other property or buying any other things without having to pay the full value upfront. In Mortgage Loan, the borrower repays the loan, plus interest over a period of many years, until he/she eventually owns the property free of any existing debt. The bank retains the authority to foreclose if the borrower stops from paying. Mortgage loan have been in existence for a long time in countries like North America, they were more or less part of the unorganized sector until a few years ago in India. After the liberalization caught on in the 90’s, a number of financial corporations have opened up to mortgage loans.
There are six types of mortgages in India
1. Simple Mortgage
The ownership of the mortgaged property is not transferred from mortgager to mortgagee in simple mortgage. If the loan is not repaid by the mortgagor then the mortgagee has a right to sell the property to recover the mortgage.
2. Mortgage by conditional sale
The property is sold by the mortgagor to the mortgagee on conditional basis. The sell becomes absolute and complete on default, but if the mortgagor repays the loan the sale becomes null and void.
3. Usufructuary Mortgage
The property is owned by the mortgagee and all the income coming from the property is received by the mortgagee until the payment of loan/mortgage is complete. There is no time limit of the repayment of the loan.
4. English Mortgage
The mortgaged property is transferred to the mortgagee by the mortgager absolutely and binds him/her to repay the loan on a certain date with the condition that the mortgagee will re-transfer the property to the mortgagor on repayment of loan before the agreed date.
5. Reverse Mortgage
The mortgagee lends money to senior citizens against their property/house. There is no need to repay the mortgage as the property automatically goes into the possession of the mortgagee in the event of the death of mortgagor. The loan is awarded as a lump sum amount or in monthly installment.
6. Anomalous Mortgage
If the mortgage does not fall under the purview in any other type of mortgage is anomalous mortgage. It can be a combination of different mortgages. The Indian mortgage industry was quite unorganized until recently. But now due to huge real estate requirements and its fast development has fueled the sector’s growth. The mortgage rates in India are registering 20 to 25% growth from the year 2000 onwards.
Paying off your Mortgage :
A Mortgage loan is usually paid off in the form of monthly installments. The interest on the loan might be fixed or floating depending on the varying market value of the property in question. But Mortgage loans with fixed interests and paid off over extended periods such as tenures of 10, 12, or even 50 years constitute the most common category of Mortgage loans. We at Mortgage-loan.in offer all the possible variations that will undoubtedly be of great help to all kinds of loan seekers.
You might also want to be accustomed to a few legal terms before you delve any deeper with the information. The period over which a Mortgage loan is paid off is called the amortization period. In other words, as the monthly installments for the repayment of the loan are collected by the bank issuing the loan, the entire mortgage is gradually paid off or amortized.
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