How Banks Sanction Mortgage Loan or LAP?
By Anupama Deshpande | Mar 25, 2019

Mortgage or Loan against Property (LAP) is a secured loan in which you have to mortgage your property as a security/collateral with the bank and avail a loan against it. You will get it upto 40% to 70% of the market value of the property.

It can be availed for various purposes such as wedding, education, purchase of an asset, medical treatment or for any business purpose. The loan amount under Mortgage or LAP can be from lakhs to crores. It can be taken for a period of 3 years to 15 years based on your need.

One must also know the Documents Required for Mortgage Loan or Loan against property (LAP) before applying for it.

If you want the answer as to how banks sanction LAP?, you need to follow below mentioned process:

You need to visit the bank branch from where you want to avail LAP to apply for LAP. You can contact the bank executive and tell him that you want to opt for LAP. He will hand over the LAP application form and also inform you about the required documentation and loan application process.

Suggested reading 5 Tips & Tricks to Benefit you while Applying for LAP

You need to fill in your personal details like name, age, contact details, bank details and income details in the Loan Application Form. You can also complete this process online. You need to submit required documents such as:

• Address Proof
• Proof of Identity
• Income Proof
• Latest Photograph
• Property Documents

After you submit the form along with required documents, the bank checks eligibility on the basis of:

• Your income
• Age
• Credit score
• Existing loans
• Documentation
• Property Documents, etc.

In case the bank is not satisfied regarding your eligibility, it will ask for:

• Additional Documents
• Guarantor
• To add a co-applicant to increase loan eligibility
• To pay off some of your existing loans

After the bank is satisfied to extend you LAP, it will ask you to meet personally. In that meeting, it will collect a photocopy of documents for KYC i.e. PAN, Address proof and Identity Proof.

You will also need to pay processing fee and legal fee.

Related Topic Should you go for Loan against Property (LAP) or Mortgage Loan or Top up Loan?

The bank will check out that the title of the property is clear. For this purpose, the surveyor appointed by the bank will visit the property site and will estimate its market value. He will also try to get feedback on the property. Bank will offer LAP to you on the basis of:

• Condition of the property
• Market value of the property
• Your loan eligibility

Loan up to 40% to 70% are generally provided against the properties.

After that the bank will finally give its approval for LAP. Then you need to submit original documents of the property and the property will be mortgaged against the loan. Then the bank will disburse the loan.

The applicant has to go through the above process through which banks sanction LAP, however, there may be some different/ additional steps from bank to bank. Some of the factor which the borrower should be careful about are choosing the lending bank after an in-depth research, check the credit score beforehand which gives an opportunity to negotiate with the bank provided carrying a good credit score and keep all the required documents for Mortgage Loan or LAP ready. Whole process in sanction of Mortgage Loan or LAP from application submission to disbursal of sanctioned loan amount takes around 4 to 5 days' time.

You must also know the Key differences between Mortgage Loan or Loan Against Property (LAP) and Personal Loan & which one is better?