Is a mortgage better than a Home loan a details analysis explains you Home loan versus mortgage loan.
Which of the two is the best depends entirely on the need of the
borrowers. Each one is useful at a time depending on the context.
There are many types of home loans available and many private banks, government banks and private companies offering these loans at discount rates of interest.
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But, in these home loans we have to choose between Home Loan for new Flat / House or Property, Home Loan for House renovation / construction / repair, Extension Home Loan, Top-up Home Loan, Property Loan, Plot Loan, Construction Loan, Home Loan Balance Transfer and Mortgage Loan.
Some of these are in addition to the existing loan. Many people are confused not knowing the difference between these. Otherwise, go ahead and listen to the advice given by the bankers.
Most importantly, most people do not know the difference between a home loan and a mortgage loan. Let's see the difference between the two ..!
Home loan meaning in simple words
What is Home loan means: Loan for Home is granted only to buy a completed house or to build a new house. Lenders mortgage that home. If we fail to repay the loan the house will be taken over and the money recovered. The money sanctioned here should be used only to buy or build a house.
Mortgage loan meaning in simple words:
What is Mortgage loan means: A mortgage loan is a mortgage on any property in their name. The money thus sanctioned can be used for anything. Failure to repay the loan will result in sale of the mortgaged property and recovery of the loan.
Although in a way the two seem to be the same. There is a lot of difference between these.
Home Loan Features
- Home loan should be used only for home construction or purchase.
- 90% of the market value of the area where the house is being built can be obtained in the form of a loan.
- The interest rate on a home loan is lower compared to a mortgage loan.
- Processing fee on home loan is between 0.8-1.2 per cent.
- Long term .. Up to 30 years to repay the home loan.
Mortgage Loan Features
- There is no limit on the use of a mortgage loan. The borrower can also use the money for his personal needs if desired.
- The loan sanctioned in a mortgage is less as compared to a home loan. Only 60-70% of the value of the property can be obtained in the form of a loan.
- The interest rate on a mortgage loan is 1-3% higher than a home loan.
- Mortgage loan has a processing fee of up to 1.5%.
- This loan has a maximum repayment period of 15 years only.
- This includes the option of taking a top-up loan on a loan without any paperwork.
Which of the two is the best depends entirely on the need of the borrowers. Each one is useful at a time depending on the context.
