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We all dream of buying a home. Home is what gives us social security. Given the current downward trends in the stock market, investing in real estate is a good alternative. Also, unlike stocks, real estate will give you a lifelong income through rent. At the same time, the value of the property will increase too. But how to raise funds for a second property? Most of us are unable to invest a huge amount at one go. This is where a mortgage loan comes to your rescue. A mortgage loan is a secured loan and you can use the loan amount to invest in real estate or for any other purposes. If you do not know how such a loan works,check below to have a clear idea about it.

What Is A Mortgage Loan?

A borrower takes out a mortgage loan to meet various financial requirements. To get this loan,you will need to put your old house as collateral.


The eligibility criteria for a mortgage depend on various factors and vary from lender to lender. However, there are some common factors that lenders consider before approving a home mortgage loan.

I. Employment:The borrower must have a steady income and provide proof of employment for the last three years. In addition, they have to give proper explanation for any frequent change in employment.

II. Debt-to-income Ratio:The lender will check the borrower’s current liabilities such as ongoing equated monthly instalments (EMIs) and monthly expenses. Lenders calculate these things to understand how much of your monthly income goes into expenses and if you are capable of repaying a new loan.

III. Age:Lenders prefer to give loans to those who can pay off the loan while they are still employed. That is why, the maturity age is 60 years for salaried individuals and 70 years for self-employed professionals. Hence, age is an important factor when it comes to applying for a mortgage loan.

IV. Credit Score:Your credit score is a numerical summary of your credit history or your past repayment history.This includes your financial behaviour like usage of credit card. The credit score varies between 300 and900. Anything above 750 is considered a good score. Anything below 500 is a poor score. Your credit score determines your creditworthiness.

V. Mortgage Insurance: Mortgage insurance is required regardless of the down payment amount.

VI. Down Payment: Down payment is an amount which pay from your own pocket. The amount depends on the lender and the type of the mortgage.On average, though, the down payment amount is 3.5% of the total loan amount.

Points To Remember

I. First of all, calculate how much you can afford. Try not to get carried away. A mortgage loan calculator may help in this case. Calculate the EMI amount and know your affordability.

II. Look for a pre-approved mortgage loan offer before taking the plunge. A pre-approved loan will minimise your worry. Many lenders even offer instant mortgage loan approval based on certain criteria.

III. Pay off your debts before availing yourself of a new loan. Obviously, you do not need to ensure a credit card with zero balance to qualify for a mortgage loan. But the fewer your liabilities are, the greater your chances are of approval.

IV. The interest rate for a mortgage loan varies across lenders. But it is generally upwards of 8.8% per annum. You can use an online mortgage loan calculator to calculate the approximate EMI.


Getting a mortgage loan is not difficult at all. All you have to do is fulfil certain criteria. You can easily get a loan of your choice and invest the amount in whichever way you want.

Nowadays, most banks and major non-banking financial companies (NBFCs) like Bajaj Finserv offer loans up to Rs.3.5 crore with a maximum tenor of 20 years. Also, you can check out any mortgage broker in Mississauga. They’re really good.

Bajaj Finserv also brings you pre-approved offers for personal loans, home loans, EMI finance on different products, and other financial services. Not only does this simplify the process of availing financing but also helps you save on time. All you have to do is share a few basic details and check out your pre-approved offer.

Preety Rani

Article is published on this site by Preety who is an employee at Tablet Hire which is ipad hire company in the United Kingdom.