| When a Mortgage loan for people with bad | | | | have to be borne by the borrower. The |
| credit is taken to purchase a house, a charge | | | | borrower binds himself to repay the mortgage |
| needs to be created in favour of the lender. | | | | loan amount as per an agreed schedule and |
| The borrower needs to mortgage the property | | | | transfers property absolutely to the |
| in favour of the lender- the bank or the | | | | mortgagee (lender) subject to the condition |
| housing finance institution. This creates a | | | | that the bank or lending institution would |
| security in favour of the bank. It enables | | | | transfer the property back to the mortgagor |
| bank to secure the repayment of the people | | | | on repayment dues. |
| with bad credit Mortgage loan. In case the | | | | |
| borrower defaults on the repayment of the | | | | In case of mortgage by way of memorandum of |
| Mortgage loan or the interest, the bank can | | | | entry, the borrower has to sign a declaration |
| enforce the security. In the case of housing | | | | stating that he is mortgaging the property to |
| loans, continuing security of the residential | | | | the lender. This declaration is entered in |
| building mortgage to the bank is accepted, | | | | the memorandum of entry of mortgage which can |
| provided the value of the property is | | | | be enforced by the bank in case the borrower |
| sufficient to cover the liability with the | | | | defaults in the repayment of loan dues. |
| prescribed margin. | | | | |
| | | | Once mortgaged, the borrower can neither sell |
| Mortgage is a form of hypothecation of the | | | | nor transfer the property to anyone else |
| property. A Mortgage loans for people with | | | | without the consent of the bank. While |
| bad credit can be secured by either an | | | | purchasing a property, the purchaser should |
| equitable mortgage, a mortgage by way of | | | | do a due diligence exercise and visit the |
| memorandum of entry, or by a registered | | | | registrar's office to see if any prior |
| mortgage. The type of mortgage differs from | | | | encumbrances on the property proposed to be |
| one bank to another depending on the loan | | | | purchased by him are there. |
| amount, value of equity, customer profile | | | | |
| etc. An equitable mortgage is created by way | | | | Normally, banks prefer to have the first |
| of deposit of title deeds. The ownership | | | | charge on a property. In case the purchaser |
| documents of the property are deposited with | | | | has availed of a loan from more than one |
| the bank. No formal mortgage deed is | | | | bank, a pari passu charge may be created in |
| executed. This is the simplest and cheapest | | | | favour of the lenders. However, this usually |
| form of bad credit mortgage. | | | | applies to large projects. In case of a pari |
| | | | passu mortgage, if there is any default in |
| Registered mortgage is the safest form of | | | | repayment, all the lenders share a right on |
| mortgage. This is also referred to as English | | | | the property as per the proportion of the |
| mortgage. No documents of property are | | | | loan amount disbursed by them. |
| required to create an English Mortgage. The | | | | |
| borrower has to enter into a mortgage | | | | The charge needs to be registered with the |
| agreement with the bank. This deed is | | | | office of the registrar. Both the lender and |
| thenstamped and registered in order to make | | | | the borrower need to be present. The mortgage |
| it enforceable. This is an expensive | | | | deal needs to be executed on a non-judicial |
| mortgage. The stamp and registration charges | | | | stamp paper. |