What factors should you consider while choosing a mortgage loan? - Loan Trivia


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Tuesday 16 November 2021

What factors should you consider while choosing a mortgage loan?

loan against property interest rate
Financial options like a mortgage loan, also known as a loan against property is a big-ticket investment that requires proper planning and considerations. Borrowers pledge their immovable property or asset and receive funds against them to finance several expenses. 

For a better borrowing experience, individuals need to consider certain factors before the application process. 

Factors to consider while availing a loan against property

1. Loan against property interest rate

Lending institutions offer various loan deals for a borrower’s convenience. However, selecting a lender that offers the best deals on loans like lower loan against property interest rates, higher loan value etc., can be a daunting task. Therefore, it is advisable to compare lenders before settling for one. 

2. Processing fees

There are several charges applicable on LAP loan that varies across financial lenders. Some of the fees levied include processing fees, secure fees, penal interest etc. Therefore, choosing a lender who offers the best loan deals with no hidden costs is important. 

3. LTV ratio

An actual property price, expressed in percentage, which may be obtained as a loan amount, denotes the Loan-To-Value ratio. For a LAP, this ratio range from 40% to 75%, depending on the property type. Thus, borrowers must calculate the LTV ratio before choosing a mortgage loan. 

4. Disbursal time

Individuals meeting the loan against property eligibility and presenting relevant documents for verification on time can get the loan amount in their accounts in no time. However, the disbursal time varies across lending institutions. Hence, it is crucial to factor in this point before choosing a particular lender. 

In addition to this, one must also choose a loan against property with a longer repayment tenor to reduce their EMI burden. Thus, borrowers must consider the aforementioned factors before choosing a LAP. 

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