Mortgage loans or loans against property are loans that property owners avail of by pledging a property they own as security or collateral. The pledged property could be a residential or commercial space or even land. A loan against property, also more commonly known as a property loan, offers several benefits. Low mortgage loan interest rates are one of the biggest benefits offered by these loans, ensuring affordable and easy-to-pay loan EMIs. 

Further, the flexibility to choose one’s loan repayment tenor as well as the loan amount makes these loans even more popular. If you are planning to apply for mortgage loan, reading about the loan against the property application process will give you a certain edge and allow you to navigate the whole process smoothly. 

Loan Against Property: The Loan Application Process 

1. Research Lenders: Until a few years ago, only a few reputed lenders offered loans against property. However, over the last few years, this scenario has changed completely. Today, borrowers have many different options to choose from. 

Banks and NBFCs as well as other financial institutions offer this loan product these days. This makes market research extremely important. Talking to different players in the market will allow you to know what you are eligible for and what loan terms and conditions you can negotiate for. 

Therefore, before applying to any lender in particular, connect with a few different banks and NBFCs in the mortgage loan space and negotiate for the best loan against a property deal. 

2. Make an Application: With most lenders offering online loan application services, applying for a mortgage loan has become fairly easy. Visit the website of the financial institution from which you wish to obtain the loan, and complete the online application form for a loan against property. However, if you are not comfortable with the online option, you can also go to your preferred lender’s office nearest to you and fill out the loan application form in person. 

3. Submit the Required Documents: After you have submitted a properly filled-out property loan application form, your lender will decide whether to extend you a loan or not. If they decide to extend you a loan, they will ask you to submit certain documents. For loans against property, lenders generally require loan applicants to submit income and address proof documents to establish identity and loan repayment capacity. 

All property documents must also be submitted so that the lender can carry out proper due diligence and ensure the property has a free title. You may also be asked for other documents. Loans against property involve substantial sums. 

More importantly, they require loan borrowers to pledge a property as security. Consequently, lenders never sanction a loan until they are certain that you can repay your loan and they ascertain this through the information and documents provided by you. 

4. Sign the Loan Against Property Offer Letter: After you have submitted all the documents and your lender has approved them, they will reach out to you to negotiate the terms and conditions of the loan. Negotiate as hard as you can. Try and get the lowest mortgage loan interest rates you can get. Additionally, also negotiate on other loan terms and conditions, such as the loan amount being offered to you, loan processing fees, EMI bounce charges, etc. Once the negotiations are done, your lender will start drafting the final offer letter. 

After you receive the mortgage loan offer letter, go through each loan term and condition carefully. The mortgage loan offer letter usually contains a lot of technical language. So, it’s best to hire a legal expert to help you understand every detail and point and ensure you are not being scammed. Lastly, sign the loan agreement and wait for your lender to disburse the loan money into your loan account.

Summary

Applying for a mortgage loan online, also known as a loan against property, is a convenient way to use your property as collateral. To secure a property loan, first, research various banks and financial institutions to compare their terms and find the best fit. Then, submit your application either online on the lender’s website or in person at a branch. 

After applying, you’ll need to provide documents for identity, income, and property verification. Once everything checks out, review and negotiate the terms in the offer letter, sign the offer letter and the loan funds will be disbursed into your loan account.