Mortgage loans: Boom for new buyers??

How can it be used to your advantage

•All of us aspire of owning a home, our very own space. We keepon planning for years to buy one. We save money, searchaffordable homes which can fit our pockets and budgets.

•This is not an easy task to find a suitable and good-to-buy housewith all the necessary comforts and basic amenities under oneroof.

•To make it possible you either have to go for home loans ormortgage loans. So if you are considering buying a home, ahome mortgage might be the most viable option for you.

•It would be an important investment for you as it will affect youfor a considerable portion of your life.

A mortgage is a loan in which property is used as collateral. This isgenerally used by those who want to purchase real property.

The loan is secured on borrower’s property. A legal mechanism isput in place so that in case the borrower defaults to pay off orviolates the terms and conditions agreed upon, the lender cantake the possession of the property and can sell it to recover themoney.

In India, we have lenders like banks, building societies or creditunion. Features like size and tenure of loan, interest rate mayvary but generally when you get a mortgage; it takes 20-30 yearsto pay off the principal as well as the interest and after that youcan be the proud owner of Flats in Noida.

In case of home mortgage, there are two kinds of interest rates:fixed and floating. Fixed rate remains the same throughout theyears but if it is floating the interest rate may change dependingon a number of factors.

There are a lot of advantages when one takes out a mortgage tobuy a home. The first and most obvious is that you will not bepaying a lump sum of money to own a home as you would notbe required to pay the full amount up front.

This is much more convenient because generally housesare a very large purchase. The added advantages ofmortgage loans are that they improve your credit score andreduce tax liability too so that you can easily invest in anygood project such as Project in Noida.

In India we have different types of mortgages: -

1. Simple Mortgage -

In this, without delivering possession of the mortgagedproperty, a mortgagor binds himself personally to pay themortgage money. If the transferor or mortgagor fails to repaythe loan, the transferee or mortgagee has the right to sell theproperty and recover the amount of loan from the sale amount.

2. Conditional Selling mortgage -

In case of a mortgage by conditional sale, a mortgagor sells themortgaged property on the condition that on default of payment of themortgage money by a certain date the sale will become absolute orsure.

On the payment being made, the sale becomes void and on thepayment being made the buyer will have to transfer back the propertyto the seller. Thus mortgagor becomes the owner of the property.

3. Usufructuary Mortgage -

In Usufructuary mortgage the mortgagor actually delivers thepossession of the property to the mortgagee.

The mortgagee can rent out the property and receive the rent.The mortgagee receives the income from the property suchUsufructuary Mortgage: in Usufructuary mortgage themortgagor actually delivers the possession of the property tothe mortgagee as through rent, profit, interest, etc until therepayment of the loan is done.

On repayment of loan the possession of the property istransferred back to the mortgagor.

4. English Mortgage -

In an English Mortgage, the mortgagor is bound to repaythe borrowed money on a certain date. The mortgagortransfers the property to the mortgagee. But such transferis subject to the condition that the mortgagee will transferthe property back on repayment before the agreed date.

5. Mortgage by deposit of title of deeds -

In such mortgage, the mortgagor delivers the title document ofthe property to the mortgagee with an intention to create asecurity thereon. Such mortgage is valid in only certain townslike Kolkata, Mumbai and any other town as the StateGovernment may notify by publication in Official Gazette.

6. Anomalous mortgage -

Anomalous mortgage is actually a combination of different types of mortgages.

Thus to buy a home or to invest in a property like Property inNoida, you can use the mortgage loans to your advantage and canfulfill your dream of owning Flats in Noida as the propertyprovides good opportunity for buyers especially the new or firsttime buyer to own a very well located house with all the luxuries.