Important Concepts Regarding Mortgage

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Understanding the important concepts regarding mortgage is one of the major factors for customers who opt to take out loans against mortgage.

Mortgage against loans is gaining popularity in India with the development of the economic conditions and the increased activity on construction and related ventures. The Indian mortgage market is experiencing a quick growth but the contribution factor of the mortgage industry i.e., the mortgage to gross domestic product (GDP) ratio is very low in India in comparison with the other developed countries.

The major components of the concepts regarding mortgage are the principal, which is the loan borrowed against a mortgage and the interest on the principal which is the money charged as interest on the loan borrowed. The rate of interest is not stable and it is altered with the changes in the financial market. Before taking out a mortgage, the customer should go through the important concepts regarding mortgage in order to compare the schemes of the different financial institutions providing mortgage loan facilities. This way the customer can opt for the scheme which suits best suits his/her requirements.

The important concepts regarding mortgage:

  • Competitive interest rate: The option of getting the interest rate lowered at the cost of number of options in the mortgage scheme.

  • Payment options: These are special features such as payment of principal, skip and double up offered by some financial corporations once a year pertaining to the date of the mortgage.

  • Rate guarantee: This scheme actually allows a fixed rate of interest for the customers.

Other important concepts regarding mortgage in India:

  • New concepts on home loans
  • Consolidation of debt
  • Concept of home equity loans
  • Concept on lending to real estates
  • Concept of mortgage refinancing

Refinancing under important concepts regarding mortgage:

Refinancing is a very important concept pertaining to the mortgage against loan schemes. This scheme emphasizes on the option of taking out another loan against mortgage is case there is insufficient funds to pay off the first one. The refinancing concepts also have an advantage which is the interest rates are lowered in case a customer takes out a refinance on mortgage.

There are other advantages of refinancing concept of mortgages, such as:
  • The total sum of monthly payments by the customer gets reduced
  • The total sum of interest paid by the customer during the term period of the loan is reduced
  • The loan term period is reduced so as to enable the customer to repay the loan quickly

Last Updated on 5/26/2011