Table of Contents
- 1 What is the difference between a mortgage and a home loan?
- 2 What type of loan is loan against property?
- 3 Is loan against property a good idea?
- 4 Why is a home loan called a mortgage?
- 5 Is loan against property taxable?
- 6 How much can you borrow against property?
- 7 What documents are required for loan against property?
What is the difference between a mortgage and a home loan?
The term “loan” can be used to describe any financial transaction where one party receives a lump sum and agrees to pay the money back. A mortgage is a type of loan that’s used to finance property. A mortgage is a type of loan, but not all loans are mortgages. Mortgages are “secured” loans.
What type of loan is loan against property?
A loan against property(LAP) is a secured loan that is sanctioned keeping an asset as mortgage with the lender. This asset can either be an owned land, a house, or any other commercial premises. The asset remains as collateral with the lender until the entire loan against property amount is repaid.
Is loan against property a good idea?
However, some people find it difficult to decide which loan to apply for or whether a loan against property is a good idea. While some concerns may be justified, financial experts say that a loan against property is one of the most secured loans and carries a lower interest rate compared to other options.
What is the difference between lap and mortgage?
A home loan is given by lender for purpose of buying a home. LAP (Loan against Property) is processed against a property that is already on borrower’s name. LAP is taken for both the personal and business usage. In this case, the mortgaged security is already owned by the borrower.
Is it better to get a loan or a mortgage?
And in case you were wondering, the main reason a short-term mortgage is better than a personal loan is because the interest rates on personal loans tend to be higher – in some cases as much as 10 times higher – than mortgage interest rates. Want expert help finding your new mortgage?
Why is a home loan called a mortgage?
The word mortgage is derived from a Law French term used in Britain in the Middle Ages meaning “death pledge” and refers to the pledge ending (dying) when either the obligation is fulfilled or the property is taken through foreclosure.
Is loan against property taxable?
When it comes to loan against property, please understand that this loan is not tax deductible – irrespective of whether it was taken for business or personal reasons. When you take a home loan, since you are investing in property in exchange for money, the loan can be exempted from taxes.
How much can you borrow against property?
The maximum amount with a Loan against Property that an applicant can avail depends on the employment status. Self-employed individuals can avail an advance of up to Rs. 3.5 crore while the maximum loan limit for a salaried individual is Rs. 1 crore.
What are the documents required for loan against property?
Documents Required for Property Loan
- Application form with a recent photograph.
- Proof of Identity (Passport Copy /Voter ID card /Driving License /PAN Card)
- Address Proof (Ration card /Telephone Bill /Electricity Bill /Rental agreement /Passport copy /Bank Passbook or Statement /Driving License)
Can we take home loan on own house?
People can avail home loans to get their house constructed – either by themselves, or by employing a contractor to construct the house – on a plot that they own. Such loans are commonly termed as ‘construction loans’. Leading lenders like SBI, HDFC Ltd, ICICI Bank, etc., are active in the construction loan segment.