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What Is a Mortgage Loan? Things You Need to Know About It


What Is a Mortgage Loan? Things You Need to Know About It


Do you want to buy a property or raise funds for financial emergencies? Consider taking a mortgage loan! A mortgage loan is highly suitable for borrowers in need of contingent funds. Therefore, you can use this loan to finance a wedding, education, medical emergencies, etc. Moreover, salaried employees, self-employed individuals, business people, etc., can borrow a mortgage loan quickly.

Here’s everything you need to know about a mortgage loan.

Mortgage Loan

What Is a Mortgage Loan?

A mortgage loan is a secured loan against collateral – usually an immovable asset like your house, non-agricultural land, or commercial property. The lender provides a principal loan amount and levies an interest rate. You can repay the mortgage loan using affordable monthly installments or EMIs.

Your asset remains in the lender’s possession until the loan amount is repaid. Besides, the lender reserves a legal claim over your help for the loan tenure. In case of a payment default or a violation of the loan agreement, the lender can seize your property and sell it.

You can take out three types of mortgages –

Borrowers can get a home loan only to buy a residential property or a commercial loan to buy a retail space. But, there are no end-use restrictions on loans against property. You can use the amount to fund medical emergencies, a vacation, education, a wedding, and more.

Key Features of a Mortgage Loan

Following are the salient features of a mortgage loan –

To Sum Up

Now that you know ‘what is a mortgage loan,’ decide on a loan amount based on your financial health and repaying capacity. Gauge your fund requirements, eligibility criteria, and an available asset to take a suitable mortgage loan plan.

Are you looking for a mortgage loan? Use our home loan EMI calculator to estimate the EMI payments toward your stipulated loan amount.

Eula Boone

I have written professionally since 2010 and have been an investor since 2015. My finance blog, economydiva.com, is one of the most visited blogs in the world, with more than 3 million readers a month. I love sharing what I know about investing, saving, and managing money and providing practical tips on how to be a smart and savvy money manager.