Home mortgage loans are those that are given against the tile of a homeownership, which can be a domestic dwelling.  These loans can also be given against a commercial property, which can be a business complex.  The money obtained from these loans can be treated as a personal loan and can be used for any purpose.  The interest rate applicable for mortgage loans vary considerably based on the credit score the individual approaching for the loan.  The amount that is financed against the property is also dependent upon the value of the property.

Before the evaluation of the property for mortgage loans the applicant should produce an encumbrance certificate, which will give the details of the existing loans on the property and also details of the previous loans that were availed on the property and the dates on which the loans were paid off the property was relieved from the loan.

• The evaluator examines the property by physically arriving at the location of the home.
• He considers the existing guideline value of the property as registered with the register office and compares it with the market value of the property.
• The market value and the guideline value are not the same always.
• Sometimes the market value can be more than the guideline value and the reverse is also a possibility.
• Based on such factors, the evaluator advices the financier about the maximum amount that can be funded in finance against the property.

Mortgage loans are not given to the full value of the property.  Before deciding on the amount that can be given to the applicant, the lender considers the repayment capacity of the applicant. They consider all the existing loans that the applicant has, if the income to expenditure ratio of the applicant is not sufficient to repay for the EMI of the mortgage loans then the bank will require a guarantor to vouch for repayment if the applicant fails to repay the mortgage loans. It is quite obligatory that the guarantor shows sound financial proof and capability to repay the loan, failing which the loan will be declined irrespective of what the value of the property is. Mortgage loans are given to those that can support some kind of repayment and not otherwise.