My Mortgage Experience

Monday, October 29, 2007

A decade ago, I was employed by one of the housing finance companies. I just recall how people would come to me without even knowing about mortgage. The access to information was restricted and the choices are limited.

What is Mortgage?
It is the method of using property as security to borrow money from a money-lending organization such as a bank or housing finance company or building society. By mortgaging, you are giving that organization the right to take possession of property if the loan is not repaid.
About five years ago, when I bought my first home, it was much easier. Now, the mortgage industry has revamped completely and people have too many choices. There have probably never been more household mortgage options available than there are in the present time. You need to make the right decision in choosing your mortgage plan and the lending organization. Here is where a Mortgage Broker can help you.

Who is a Mortgage Broker?
Mortgage broker is a person or an organization specializing in finding mortgages for those wishing to buy a property. A mortgage broker can search the market and find out which mortgage is the most appropriate, given your preferences.
Before you accept a mortgage plan, do your homework. Some of the items that you need to check:

  • Tenure of loan

  • Interest of loan

  • Fixed rate or Variable rate?

  • Is your principal adjusted monthly, quarterly or annually?

  • Do you need to produce any additional security?

  • Administrative, Technical or Legal fees to be paid

  • Will the organization impose penalty for early repayment?
Finally, ensure that the loan repayment terms fall within your budget. Do not bite off more than you can chew. The normal industry practice is to restrict your monthly instalment to about one-third of your take-home pay, if you do not have any other commitments. Choose the right plan and you will have a peaceful future in your sweet home.

This post is brought to you by Mortgage Broker


DEBASIS October 30, 2007 at 4:15 AM  

Thanks for good tip on mortgage
I have a question,our house was built by my father taking homeloan
from HDFC I was the the mean time my father expired but without an insurance,can HDFC

Admin October 30, 2007 at 7:20 AM  

Hi Debasis,

Sorry to hear that. I am out of the housing finance industry for more than 10 years. So, I am not sure what is the present requirement.

Most of the housing finance companies recommend you to take an insurance plan to cover the outstanding loan amount. This is referred to as Home Protection Plan.

But, I advise you to discuss with HDFC's branch manager or even contact their head office. You may be in with a chance. No harm in trying. I wish you all the best.

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