Mortgage loan is a type of loan which is generally used to purchase a home, land or a real estate property. These types of loans are liens against property.
How Does Mortgage Loan Work?
Whenever a person wants to purchase a home, land or a real estate property. He/she might get a mortgage loan to purchase that property. Under which the lender will pay the total amount to purchase the property upfront. Which would be paid back by the lender in the time duration selected at the time approving the loan in the form of EMIs.
If the borrower fails to pay back the amount (with the interest) then the property will be foreclosed by the lender.
Difference Between A Loan And A Mortgage Loan?
The major difference between a loan and mortgage loan is that a mortgage loan is a secured loan. As under this the borrower promises to keep a collateral.
Generally, the Loan is a financial transaction that happens between the parties. Under which a lender pays the total sum to the borrower and the browser agrees to pay it back in the form of emis.
Whereas mortgage loan is a loan that is taken against a property to purchase a home, land or any real estate property. These are secured loans. As the borrower keeps a property as collateral. Under the circumstances if he doesn’t pay back the loan. His loan will be foreclosed by the lender.
Can You Get a Mortgage Loan?
To get a mortgage loan. You need to apply for the loan through an application with the lender you have selected. Such as Zatpat Loan, which is the provider of mortgage loan in ahmedabad. Then your application would be checked by them for the amount of assets and income that you have.
Your credit score will also be taken into consideration with the assets. The interest rate in mortgage loans is less as compared to personal or business loans. But the riskier the borrower is the higher the interest rate is.
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Types Of Mortgage Interest Rate?
Normally there are two types of interest rates that are followed under mortgage loans. Fixed and variable interest rate.
Under Fixed interest rate, the rate will not change for the entire tenure of the mortgage loan (be it 10 years or 30 years).
But in variable interest rate (also known as adjustable-rate mortgage), the rate keeps fluctuating over the mortgage loan duration. The interest rate will depend on what is going on in the market.
Who All Are Included In Mortgage Loan?
Generally there are two parties involved in a mortgage loan.
1) Lender
The lender is a person who provides you the money to get yourself a home, land or any real estate property. It can be a bank or a credit union or a mortgage loan providing company such as Zatpat Loans.
Once you decide on the lender and apply for a mortgage loan. Then your preferred lender will check your application for financial information such as your credit score, income, assets and debt. So that they can understand you better and will you be able to make the payment back to the lender or not.
2) Borrower
The borrower is the person who borrows the money from the lender for the purchase of his house or land. You can apply for the loan alone or with a co-borrower.
Do You Need A Mortgage Loan?
Yes, in today’s time if you are looking to purchase a dream house. Then you would need a mortgage loan. As the prices of homes have skyrocketed. Due to which getting a house with the help of savings is not possible.
But by getting a mortgage loan – an individual can purchase a house of his dreams. By paying a 5-10% down payment. Which can be done with some part of the savings and for the remaining amount. It can be converted into the monthly EMIs to be paid back.