If you plan to purchase a property, be sure to find out whether a loan has been taken out against it or not. Read on to learn how you can check!
Overview:
If you’ve decided to purchase a house, you should find out if a loan has been taken out against it. Make sure the property isn’t already mortgaged if you intend to use it as collateral for a house loan or loan against property on the one you’re about to purchase.
The main goal of this is to protect the interests of lenders and society as a whole. It will help prevent people from getting credit for the same property from multiple lenders.
This can also check if someone is trying to sell an already mortgaged property. You can take help from vakilsearch for this process, they will guide you step by step and make sure that you get the property details about the property you’re about to buy.
What is Registration of Property?
The registration of property is the process by which a person or entity registers its ownership in a piece of real estate, such as an apartment building. A deed to the property must be filed with the appropriate government agency before it can be transferred into the name of another party.
Under the Registration Act 1908, the property must be registered for sale, assignment, gift or lease. Under Section 17 of the Registration Act, 1908, any transaction involving the sale of property worth more than Rs 100 should be registered.
If someone does the above transaction without registering the property, the transaction cannot be proven in court. The registration is done by the local registrar and it is a legal document which states that you own the house.
It also mentions all the details about who owns what portion of land, how much they are paying for rent etc. If you have bought a house from someone else then this will be done automatically by them when they register their ownership over their property with the local registrar.
Property registration involves the necessary stamping of the deed of sale and payment of registration fees and registration with the sub-registrar in the relevant jurisdiction.
When a property is purchased directly from the developer, registration amounts to a legal transfer. If the property purchased is a second or third transaction, it will be a stamped and registered deed of assignment.
What is a Loan Against Property?
The loan against property program is a secured personal loan that you can draw against by placing your property as collateral or security.
These personal loan programs are also called mortgages. Real estate loan interest rates range from 8.00% per annum to 25% per annum LAP allows you to obtain a loan of up to Rs 250 crore for a term of up to 20 years.
You can use a real estate loan for commercial property and store purchases, or use it as a business loan and finance a range of professional expenses.
Additionally, you can use the loan as a personal loan to finance a family wedding, or just use the loan to buy a property. This versatile use of home loans makes it a sure winner.
In both cases, the loan amount depends on the value of the property you are buying or lending to. If the property is in good condition and is located in a convenient area, you can generally take out a loan of 70% to 80% of the property value.
Real estate loans in India are becoming more and more popular, you can take out loans for commercial or residential properties or even land.
What is eligibility for loan against property?
-
Ownership of Property:
– Individual: The applicant should be the legal owner of the property against which the loan is sought.
– Co-owners: If the property has multiple owners, they all may become co-applicants for the loan.
-
Age Criteria:
– Minimum Age: Generally, the applicant should be at least 18 years old.
– Maximum Age: The upper age limit varies among lenders but is typically around 60 to 70 years at the time of loan maturity.
-
Stable Income:
– Lenders often require a stable and regular source of income to ensure the borrower’s repayment capacity.
– Salaried individuals need to provide salary slips, while self-employed individuals may need to submit income tax returns and financial statements.
-
Property Valuation:
– The loan amount is determined based on the value of the property. Lenders may conduct a valuation to assess the property’s worth.
-
Property Title:
– The property should have a clear and marketable title, free from any legal disputes or encumbrances.
Advantages of Loan Against Property
-
Higher Loan Amounts:
– Loan against property offers substantial loan amounts compared to other types of loans, making it ideal for significant financial needs.
-
Lower Interest Rates:
– Interest rates for loans against property are often lower than those for unsecured loans, making it a cost-effective borrowing option.
-
Extended Repayment Tenure:
– Borrowers enjoy longer repayment tenures, spreading the repayment over several years and reducing the monthly financial burden.
-
Versatile Usage:
– The funds obtained through a loan against property can be used for various purposes, such as business expansion, education, medical expenses, or debt consolidation.
-
Quick Processing:
– The loan processing time is relatively faster compared to other secured loans, providing quick access to funds.
How Can You Check if a Loan is Taken Against Property?
To make sure that you’re not a victim of fraud, you need to go through proper documents and check if there is a loan against proerty before going through the registration process. Vakilsearch can help you with the process.
They have a team of professionals who will tell you which documents to look for and what information you need to check. You can contact them online and solve your queries.
The Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) maintains a record of all the properties and their mortgage information is available to them.
The new buyer can access this information by paying a minimal fee. You will get access to the property’s information by searching its registration number, address etc.
The major limitation of this online portal is that it will both have information about the loans Taken from non banking institutions. In such cases, the buyers have to run a check on their level.
Why is it Important for You to Check if a Loan is Taken Against Property?
If you plan to buy a resale property from a seller who has already secured a home loan, then you must do some due diligence.
First, check to see if the current owner has any outstanding home loans, electricity and water bills, or other charges on the property. You also need to check if the property is owned by a single owner or shared.
It should also be checked whether the property is a rental property or an owner-occupied property. If the property is a rental property, the seller will require an NOC from the government agency.
If you want detailed information about this process, you can contact vakilsearch. Their team of experts will answer all your questions and even help with the legal procedures.
Conclusion
A Loan Against Property means that the property remains collateral to the lender until the loan is repaid. If the house you are about to purchase already has a loan against it, you might become a victim of fraud.
It is very necessary to be careful when checking property details before the registration process. CERSAI has all the information about registered properties.
You can visit their website, pay a small amount of ₹50, enter the details about the property such as addresses or registration number and get the details. You will get information about any loan Taken Against the property and it will help you make an informed decision.
For more clarity, contact Vakilsearch. Our legal professionals will guide you through the process and make it easy for you. With decades of experience, their expert team can help you with any issue you may have.
FAQ
What is the maximum loan amount for a loan against property?
The maximum loan amount depends on factors like the property's value, the borrower's income, and the lender's policies. It can range from a percentage of the property value to a fixed amount.
Can I repay the loan against the property?
Yes, a loan against property can typically be repaid through monthly EMIs (Equated Monthly Installments) over the chosen tenure.
What is the interest rate for a loan against property?
Interest rates vary among lenders and are influenced by factors like market conditions, the borrower's creditworthiness, and the loan amount. It is generally lower than unsecured loans.
What is a loan against property called?
It is commonly referred to as a Loan Against Property or LAP. The property, usually residential or commercial, serves as collateral for the loan.
What is the processing time for a loan against property?
The processing time varies among lenders but is generally quicker than other secured loans. It involves property valuation, document verification, and approval processes.
Also Read,
