As far as unlocking the value of your property is concerned, property sale is not the only option.
Mortgage can do the unleashing job for you in the wake of increasing realty price.
In the Indian loan market, the option of raising money against property was a choice used largely by the self-employed and businessmen for the liquidity purpose.
As the banks in the Indian banking system are getting aggressive in this loan segment, it can be a profitable option even for the salaried professionals.
In the recent years, raising finance through the equity of property too has become much more refined and the interest rates have turned attractive keeping the benefits of the borrower in mind.
In Indian loan market home loans are being offered with an interest rate of 10-12 per cent.
In that context the mortgage loans or loans against property may be slightly more expensive but flexibility is the added advantage.
The interest rate on loans against property tends to be in the range of 13-14 per cent and the tenure of repayment is slightly shorter.
Generally, such loans are issued for a time frame of 10 years though some banks have extended tenure of 15 years.
A number of banks, particularly private and the multinational, are aggressive in this Untapped and unbound loans against home or property.
The maximum loan amount that can be sanctioned to the borrower depends on the value of the property and banks are less hesitant when the loan size is below 60 per cent of the market value of the property.
Such loans offer the overdraft facility to the borrower.
In case of overdraft the interest burden depends on the usage of funds.
Loan against property can also be the profitable option even for those who are looking for their second or third immovable property.
Generally, banks do not worry about the end use of the property(whether for rent or sale) and such loans were given to make your presence felt in the highly profitable real estate market.
These loans can also be available for funding educational requirements or any other large expenditure .
Now, with the increasing competition in this segment and the liberal terms of RBI(it is not wise to count the recent Repo and CRR hike as they are only short term in nature)interest rates showing signs of stability.
So the property owners can use this loan option for investing in another property.
The advantage is more so when the prospective buyer falls short of margin money for his purchasing the second property.
Besides the property owner, other borrowers in the form of co-applicants too can also use the mortgage option, subject to certain terms and conditions.
Another big advantage with the loan against property is that it can be utilized even when a home loan is in operation.
For example, if a property owner has taken a home loan for the purchase of an immovable property with a tenure of 10 years, he can re-mortgage the property with the same bank for utilizing the loan later.
No doubt, mortgage loan too is a loan against property but it cannot get any tax benefit for the borrower.
The income tax benefit under Section 24 is confined to the home loans only.
However, the interest component may increase when the borrower is not a salaried employee.
Borrowers would be better off if they keep an eye on their repayment capabilities before going in for the loan against property.
Analyze different components of the loan and then go for the loan plan according to your need.
Mortgage can do the unleashing job for you in the wake of increasing realty price.
In the Indian loan market, the option of raising money against property was a choice used largely by the self-employed and businessmen for the liquidity purpose.
As the banks in the Indian banking system are getting aggressive in this loan segment, it can be a profitable option even for the salaried professionals.
In the recent years, raising finance through the equity of property too has become much more refined and the interest rates have turned attractive keeping the benefits of the borrower in mind.
In Indian loan market home loans are being offered with an interest rate of 10-12 per cent.
In that context the mortgage loans or loans against property may be slightly more expensive but flexibility is the added advantage.
The interest rate on loans against property tends to be in the range of 13-14 per cent and the tenure of repayment is slightly shorter.
Generally, such loans are issued for a time frame of 10 years though some banks have extended tenure of 15 years.
A number of banks, particularly private and the multinational, are aggressive in this Untapped and unbound loans against home or property.
The maximum loan amount that can be sanctioned to the borrower depends on the value of the property and banks are less hesitant when the loan size is below 60 per cent of the market value of the property.
Such loans offer the overdraft facility to the borrower.
In case of overdraft the interest burden depends on the usage of funds.
Loan against property can also be the profitable option even for those who are looking for their second or third immovable property.
Generally, banks do not worry about the end use of the property(whether for rent or sale) and such loans were given to make your presence felt in the highly profitable real estate market.
These loans can also be available for funding educational requirements or any other large expenditure .
Now, with the increasing competition in this segment and the liberal terms of RBI(it is not wise to count the recent Repo and CRR hike as they are only short term in nature)interest rates showing signs of stability.
So the property owners can use this loan option for investing in another property.
The advantage is more so when the prospective buyer falls short of margin money for his purchasing the second property.
Besides the property owner, other borrowers in the form of co-applicants too can also use the mortgage option, subject to certain terms and conditions.
Another big advantage with the loan against property is that it can be utilized even when a home loan is in operation.
For example, if a property owner has taken a home loan for the purchase of an immovable property with a tenure of 10 years, he can re-mortgage the property with the same bank for utilizing the loan later.
No doubt, mortgage loan too is a loan against property but it cannot get any tax benefit for the borrower.
The income tax benefit under Section 24 is confined to the home loans only.
However, the interest component may increase when the borrower is not a salaried employee.
Borrowers would be better off if they keep an eye on their repayment capabilities before going in for the loan against property.
Analyze different components of the loan and then go for the loan plan according to your need.