Among a wide variety of lending products offered by banks to individuals, lending for various types of property has recently been actively developing, including real estate collateral. Traditionally - this is a mortgage: a loan for the purchase of a finished or under construction apartment, cottage, townhouse.
Legal Aspects
To begin with, a loan secured by real estate in terms of law is the mortgage, that is, the legal relationship arising from the conclusion of a loan agreement with collateral in the form of a mortgage of real estate. This is the same as the traditional (in the domestic sense) mortgage: that is, it does not matter, the loan is taken for the purchase of a new real estate object or on the security of the existing one. To check your property loan eligibility, ask home loans in Mumbai provider.
Legally, such loan agreements will not differ either in the text or in the consequences: there are words "mortgage of real estate" - means a mortgage. In the law, these terms are synonymous. A loan secured by real estate can be executed either by a mortgage (mortgage) agreement, by the way, many banks write and either in the form of a mortgage.
The main consequence for such contracts is the right of the creditor (in this case a bank) to take away the real estate that you will provide as collateral, in case you do not pay in due time on the loan. And it will not matter: you have a different place of residence, if small children are prescribed - the law in this case will be cynical. By the way, it's enough to delay payments at least three times within a year, so that the apartment is taken away from you even in pre-trial order.
As for the package of documents that will need to be collected to receive money on the security of real estate, as well as the requirements that banks make for future borrowers, they are the same as under a normal mortgage - neither more nor less. An insignificant exception can be made if the amount of the loan is significantly less than the value of the collateral object - and then, "donate" can only a certificate of income or proof of employment, but such exceptions, frankly, are very rare, and sometimes there are more to pay for such indulgences, than if you collected a complete package of documents.
So, you cannot count on the speed of registration of such a loan. Usually it takes one month: one week to collect a full package of documents for an apartment or other real estate object (including the appraiser's visit to the place and drawing up an opinion); another week - for consideration by the bank of the application; week - for the collection of documents; week - for registration of the transaction in the federal registration service. If you want to save time, it's better to contact pawnshops, consumer cooperatives or private money lenders, there the application will be processed much faster, but the interest rates will be much higher.
Loan objectives
Today, banks offer a lot of options, ranging from simple consumer lending, when the purpose of the loan is not requested. Some prescribe in the terms of lending mandatory goals such as the acquisition of other real estate, construction of real estate, repair. Moreover, the targeted expenditure of the loan will have to be confirmed without fail - otherwise they will require to return the loan or take away the collateral object. In fact, for you as a borrower there is no fundamental difference. The main difference will only be in the interest rate, and even then, not much: 1-2% per year.
By and large, almost any: apartments (absolutely ready), cottages, townhouses, land - the main thing is that the right of ownership was formalized. In principle, the requirements for real estate for loans under its pledge are the same as for a standard mortgage for the acquisition of real estate (as we already mentioned above, the law governing such legal relations is one). Another thing is that cottages and townhouses (if you make out a loan secured by suburban real estate), usually take a pledge only together with the land on which they are located. So, keep this in mind: if the land is leased (albeit long-term), such a property may not be pledged as security.
As for commercial real estate (office, retail, warehouses), in the "pure form" banks are not advertised the possibility of obtaining loans by individuals on bail of such real estate. The reasons for this are two: firstly, very rarely commercial real estate is registered in the ownership of individuals, usually legal.
Secondly, if a citizen owns a commercial real estate - here with a high degree of probability it can be argued that such a citizen is engaged in entrepreneurial activity - which means that a loan against property is needed for business purposes.
In this case, the bank, in accordance with the requirements for assessing credit risk is forced to consider such an application, not as a loan to an individual for domestic needs, but as a credit to a legal entity for the conduct of business activities. And this is already another pledge agreement, and, in principle, the entire package of documents and requirements for future borrowers are different. Although individually, probably, such issues with the bank can be solved - but it will be more an exception to the rule than the norm.
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