Home Loan And Mortgage
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Home Loan and Mortgage

 
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Let’s start by understanding Mortgage.

What is Mortgage?

Mortgage most simply, from past many centuries in India, is defined as Girvi Rakhna for funds.

We will here talk only about Property Mortgage.

Mortgage can either be done to raise funds for purchase of the same property (which is being mortgaged) or for raising funds by unlocking the inherent value, of an already existing self owned property.

Legally speaking Mortgage can be of 2 kinds (most common):

  1. Equitable Mortgage – Here original property documents are deposited with the lender till such time the borrowed funds through this mortgage is repaid back in full.
  2. Registered Mortgage – Here the lender records a charge on the property in a public register and gains sufficient rights to enforce its security such as taking possession or selling the property.

Hence, we see that mortgage is a tool to raise funds or unlock the liquidity in a property.

In case of retail mortgage in India 85% to 90% is of type 1 and 10%-15% of the retail mortgage constitute type 2 mortgage.

You can visit Dictionary dot com for a more exhaustive definition of mortgage

or visit Wikipedia for understanding mortgage

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