Mortgage Loans - An Easier Option

The Indian real estate sector is booming and the future is very bright and jaunty. The economic progress, the FDI (foreign direct investment) and the Indian middle class which is growing richer by the day are assisting to plot it higher on the growth chart. As a result of this Indian real estate market has become the fastest growing markets in the world. The most popular and desirable spots for investment in India are Delhi, Bangalore, Chennai, Bombay, Hyderabad, gurgaon and Kolkata. The citizens and even the foreigners and people who don't wish to settle in the country are buying property here, and the mortgage business in India is expanding. A mortgage is a loan you take out from a mortgage lender to pay for a property. If you don't pay back the loan as agreed the lender can take possession of the property and sell it to repay the loan. At present the industry financing mortgages in India is an enormous 18 billion U.S. dollars with the local as well as the foreign banks and non banking enterprises taking control. A significant change in the structure of the mortgage industry is being marked in the recent years. Presently the banks are gaining market share in direct housing finance segment. From estimation it is found that the share of commercial banks in the direct housing finance segment has increased from 27% in FY 2000 to 57% in the FY 2003. The current market leader is HDFC (Housing Development Finance Corporation) though there are others institutions like SBI (State Bank of India) and LIC (Life Insurance Corporation) which offers loans. Mortgages are usually a preferred option while buying property as the Indian market offers home loans and other mortgage facilities at reasonable rates as compared to the European and American markets.

Banks provide loan against mortgage of property on an attractive rate of interest i.e. mortgage loans. Businessmen, self employed professionals, salaried customers are all eligible to apply for the loan like equity loans, mortgage loans, etc. It enables the borrower to apply for loan against a fixed asset. The maximum amount of loan depends on a number of factors, like customer's profile, his financial standing and repayment capacity, tenure of the loan. The repayment tenure increases or decreases with the amount of loan. Repayment is done through equated monthly installments or EMI. Interest can be paid either on fixed or floating basis like adjustable rate mortgages. Banks charge prime lending rate as their interest. Interest rate can be discounted for existing clients or in special cases according to the policies of the bank.

If you too are thinking of buying property on mortgage loan you need to equip yourself with the relevant facts. There are various types of home loans like those for constructing your house, renovation, house purchase, NRI loans and land purchase. What you need to consider most importantly is the interest rates which are of two types- the fixed and the floating rates. A loan on a floating rate is riskier as this rate will change with a change in the lending trends of the market whereas market fluctuations hardly affect fixed interest rates. Another main thing is the tenure within which you need to pay back your loan. If you are paying back through monthly installments, you tend to pay more in interest. The rate of interest and the tenure vary across different institutions and generally range from 10 to 18 percent. You can easily take the help of a mortgage broker to give a proper shape to your plan. A mortgage broker in India will give you the much needed guidance and will help you avail of the right home loan and mortgage offer that will suit both your budget and your choice. Though the industry is expanding, there are still some bothering issues that need to be solved. The Indian government needs to step back a little and give way to the private enterprises that not only promise high revenues but also strive to provide efficient services to their clients. Some of the laws too need to be relaxed so that they facilitate transactions rather than becoming a hindrance. These questions when answered will pay in the long run and contribute to the positive transition of the industry.

Home loans can help you purchase a new dwelling. Get money to get the things of your needs or lower your monthly mortgage payments. Before applying for a home mortgage loan, make sure you meet the required criteria. You should have good credit, a good work history, a small percentage of existing financial obligations and liabilities, and a record of on-time payments for other mortgages that you may have.