The Indian mortgage market is seen growing at a slow rate and contributes around 10% to our country’s economy. Nonetheless, mortgage loans are considered as a safe loan option by both lenders and borrowers.
To avail a mortgage loan you will have to keep an asset as collateral with the lender. In case the borrower fails to pay the loan amount, he can choose to sell the property to repay his dues.
Buying a new house is different than purchasing a mortgaged property. Also, the cost at which a mortgaged property is sold is less than the rate of a new property irrespective of the locality. Also, there are several types of mortgage loans for you to choose from. Nonetheless, before you purchase a mortgage property you should collect details and perform evaluations to ensure the worth of your money.
Given below is a list of certain things that you must know before purchasing a mortgaged property.
- Condition of the Property
Make sure you check the condition of the property before you purchase. There are possibilities that the property will have some faults as it was preoccupied with your seller.
Before you purchase any property under a mortgage loan make sure you check the age of the property. The vintage of the property will ensure a better analysis of the amount at which it is being sold. Also, it is advisable to refrain from buying properties that are too old as there may be considerable defaults which you will have to fix.
While you buy a mortgaged property, make sure you collect the sales deed along with the property tax papers from your seller. Also, check the property papers thoroughly to ensure that the property ownership lies with the seller and that there is no forgery. Consider rechecking those documents with the seller’s lender as well. Among the most important documents you should check out include –
- Sale Deed – In the case of the mortgaged property, the sale of deed always lies with the lender who has lent the mortgage loan in the first place. This is in tune with the act of mortgaging a property which is simply a transfer of an interest of the property in concern. Make sure you verify the ownership of the property albeit via a photocopy at the least.
- Stamp Duty – Stamp duty paid to the authorities will help you gauge your expenses when you aim to register the property.
- Tax receipts – Tax receipts are a must. Make sure that all previous tax dues are paid in full. If not, you should compel the owner to pay such residual tax as a part of the property deal.
- Market Pricing
Analyse the market price of the property before you agree on the costs at which your seller is providing you with the property. As the seller has to repay the loan against property urgently, he usually sells the property at a discount.
- Property Evaluation
An advantage of buying a mortgaged property is that you do not have to go through a tedious property evaluation process. The property has already been verified and evaluated by your seller’s lender against which he has availed a loan against property. Thus, make sure you collect and check the evaluation report from the lender before you purchase the property.
However, make sure you check the charges of your mortgage loan before the transfer so that you can analyse your finances. NBFC such as Bajaj Finserv provide loans and other financial products at an attractive rate of interest against minimal documentation. They also offer balance transfer facility, online account access, minimal part-payment and foreclosure charges, flexible EMI tenor and other facilities.
Bajaj Finserv also provides pre-approved offers to make the application process hassle-free. These pre-approved offers are available on both secured loans like home loans and unsecured credits such as business loans and personal loans.
Apart from the above mentioned factors, you should also consider checking the process involved in such purchases. Also, make sure you get the ownership of property under mortgage loan transferred to you as soon as possible.