Mortgages come in a variety of types. The different types of mortgages make it easier and more convenient for the borrower to obtain a loan. This provides the banks the power to purchase and sell the property if the borrower fails to repay or otherwise violates the terms and conditions.
It is also critical to understand the various types of mortgages and their implications.This will assist you in making sound selections and selecting the appropriate type of mortgage.
What Exactly is a Mortgage?
Mortgage comes into play when property, land, or any other commodity is used as collateral to borrow money or obtain a loan from a lender. A mortgage is used when a person borrows money from a lender (bank loans) and forms an agreement in which he/she receives cash in exchange for a real estate property as a guarantee with the bank until the total amount is repaid.
The Different Types of Mortgages in India
There are six main types of mortgages found in India. They are discussed below:
Simple Mortgage
The mortgagee is not given possession of the mortgaged property in this case. The mortgagor, on the other hand, legally binds themselves to repay the mortgage money in exchange for the mortgagee agreeing to have the right to sell off the property to gain their money back if they fail to repay.
Usufructuary Mortgage
The mortgagor grants the mortgagee control of the property until the mortgage money is repaid and allows them to reap the profits produced from it (in the form of rent, etc.). In exchange, the mortgagee promises to appropriate the same as interest or payment on the mortgage.
Mortgage through Title Deed Deposit
With this mortgage, the mortgagor gives the mortgagee with title documents to the immovable property in order to generate security on the same.
English Mortgage
The mortgagor agrees to repay the mortgage money by a specific date and subsequently transfers ownership of the property to the mortgagee. The mortgagee, on the other hand, commits to retransfer the property to the mortgagor once the mortgage money has been paid in accordance with the terms and circumstances.
Conditional Sale Mortgage
A conditional sale mortgage occurs when the mortgagor sells the property to the mortgagee with the understanding that the sale will become absolute if repayment is missed. In addition, upon repayment of the loan, the transaction becomes null and void, and the mortgagee returns the property to the mortgagor.
Anomalous Mortgage
An Anomalous Mortgage is one that does not fit into any of the above-mentioned mortgage categories.
How to Apply for a Mortgage Loan in India?
Applying for a mortgage loan in India can be difficult, however, Achyut Group provides end to end service to its customers to ensure timely approval and disbursements of home loans. Moreover, Achyut Group has project approvals from most of the nationalised banks to ensure speedy approval and sanction of loans. Once flat/ property is booked, ensuring appropriate paperwork and following recommended processes helps with the mortgage process.
Read the terms and conditions carefully, weighing the benefits and drawbacks of the banks you have shortlisted. The loan is granted once the submitted documents are verified. Achyut Group’s executives are always there to help you with the loan process with the bank of your choice.
