Mortgage Loan: What Is It?
In the realm of property purchase or sale, one of the most important and complex aspects is the
mortgage. For example, suppose you want to take a loan from a bank or any financial institution to buy
a house or any property. In that case, you’ll need to keep your own funds secured with the bank. The
process of taking a loan for purchasing property is essentially a mortgage or a secured loan.
Why Should I Take a Mortgage Loan?
The answer is quite simple. The biggest advantage of a mortgage loan is that you don’t have to sell the
property against which you’re taking the loan.. Once you’ve repaid the loan, the ownership of the
property is entirely yours again. Therefore, a mortgage is an excellent option for significant investments
like buying a house, constructing, or purchasing a flat.
How Do I Start the Mortgage Process?
In the process of buying a property, one of the initial steps is usually obtaining a mortgage. Finding the
right bank or financial institution for your mortgage is the next crucial step after ensuring the security of
your mortgage. To find the right bank or financial institution, start with some web research. You can
easily find information about mortgage terms, interest rates, and other details related to mortgages
from almost all banks and financial institutions on the internet. Afterward, shortlist several banks or
financial institutions from the top ones. Consider factors like risk, security, and the credibility of the
institution to select the best one for your convenience. It’s best to seek advice from someone
experienced in mortgage matters if possible.
Am I Eligible for a Mortgage Loan?
To take a mortgage loan, you need to meet certain eligibility criteria determined by the lender. The
specific qualifications may vary from one bank or financial institution to another. However, some
common eligibility criteria that almost all banks or financial institutions consider include being income-
earning and being at least 21 years old.
Apart from these two main topics, there are other essential factors to consider when taking a mortgage
or secured loan. For example, if you’re an employee, the type of your company plays a significant role.
By ‘type of company,I mean factors like the company’s fixed assets, the number of employees, business
tenure, etc. Additionally, your monthly income, investments, credit score, savings, and employment
tenure all influence the lender’s decision when granting a loan.
What Documents Do I Need for a Mortgage Loan?
When applying for a mortgage, the bank or financial institution will require some primary documents
from you, regardless of your status:
– Last year’s updated bank statements
– Updated tax clearance certificate
– Guarantor’s credentials
– Copy of National ID/Passport (applicant and guarantor)
– Utility bills
– Copy of savings/investment documents (if any)
Furthermore, depending on your applicant type, you may need to submit additional documents:
For Salaried Individuals:
– Letter of Introduction (LOI) from the employer
– Updated salary certificate of the last year
For Business Owners:
– Trade license for the last three years
– Updated bank statements for the last year
– Registered partnership deed and Certificate of Incorporation (if applicable)
For Self-Employed Individuals (Doctors, Architects, etc.):
– Membership certificate of the relevant professional association
– Self-pad declaration with seal
– Professional degree certificate
Property-Related Documents:
– Deed of Agreement
– Apartment booking documents
– Copy of registration (if applicable)
– Other legal documents as required
How Long Does It Take to Get a Mortgage Loan?
The time frame for applying and arranging a mortgage loan depends on the lender. Typically, a
reputable bank or financial institution can process the application and disburse the funds within 30-35
days.
The delay in obtaining a mortgage loan can be due to various reasons, making it a complex matter to
investigate. Regular communication with the lender and ensuring all necessary documents are
submitted can expedite the loan approval process.
