5 Tips & Tricks to Benefit you while Applying for Mortgage Loan or LAP

If you are looking for a loan while owning a property and also want to fulfil following things:

• Want to get lower interest rate
• Higher loan amount
• Higher loan tenure
• More chances of getting approval
• Negotiable terms
• Faster approval
• Minimal documentation

Then you can apply for Loan against Property which satisfy all the above points. LAP serves as one of the best loan options to meet your financial needs in a fast, easy and efficient manner.

It is a secured loan, in which the property is offered as a security or collateral to the bank and at the same time it allows the owner of the property to continue occupying the premises.

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

Outlined below are the 5 Tips & Tricks to Benefit you while Applying for Mortgage Loan or LAP:

(1) Do In-depth Research in Selecting Lender

The foremost essential thing is to choose the right lender for your LAP. For this purpose, you can use online financial marketplaces like codeforbanks.com to compare and choose the most suitable lender.

Important parameters for comparison among various lenders are loan amount, tenures, interest rate, processing fee, Loan to Value (LTV) ratio, service terms, etc.

Suggested reading How Banks Sanction LAP?

(2) Apply according to your Eligibility

You should apply for LAP as per your eligibility as applying for too high of a loan amount may lead to rejection of your loan application. In order to check your eligibility, you should use a loan against property calculator through which you could get an idea on your loan eligibility. This online LAP eligibility calculator tool will assist you in checking your loan eligibility on the basis of your age, income, tenure, etc. before applying for a loan.

After that you can apply for the loan amount according to your eligibility to reduce the chances of your loan application getting rejected.

(3) Check all the Costs Involved in Mortgage Loan or LAP

It is important to remember that apart from loan interest rate, there are many other costs in the form of fees and charges involved in LAP such as:

• Processing Charges
• Legal Charges
• Insurance charges
• Documentation charges
• Prepayment charges
• Swap charges, etc.

You must also pay attention towards including these costs at the time of calculating the total loan cost of LAP. You must get clear written agreement form the lender before handing over title and other documents to agents for loan processing.

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

(4) Never apply for LAPs with Multiple Lenders

You should never apply for LAP with multiple lenders because they will ask for your credit reports from credit bureau. Such hard enquiries will get registered in your Credit Report. If you apply for LAP with multiple lenders, you are viewed as desperate credit hungry.

In such situations, lenders can either reject your loan application or offer LAP at increased interest rates.

(5) Negotiate on Interest Rate with the Lender Based on Credit Score, Loan Amount & Tenure

If you carry a good credit score say 750+ then you should negotiate on Interest Rate with the Lender. It is also seen that sometimes banks offer lower interest on a higher loan quantum as compared to lower loan amount. If you are opting for higher amount then you can ask the lender for lower interest rate.

Banks usually offer lower interest rates on LAP depending on the LAP tenure i.e. they offer lower interest for higher tenure loans so you should also keep this in mind as this will help you in interest rate negotiation with the lender.

Our Remarks

LAP is considered beneficial and easy to get type of loan still if you keep above mentioned 5 Tips & Tricks to Benefit you while Applying for Mortgage Loan or LAP, you will end up with getting the best deal. With any kind of loan, if the tenure is high then your interest outgo is higher. Points detailed above definitely will help you to avail LAP on better interest rates and with good terms.

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

Share This : Anupama is a Co-Founder of CodeForBanks.com. She is an MBA (Finance) and Chartered Financial Analyst (CFA). She also carries a Fellowship degree in Life Insurance Sector and is a Master of Computer Application (MCA). She is an expert in Finance Field with an experience of over 18 years on different managerial positions in finance industry including Stock Market, Depository and Mutual Fund Sectors. Apart from that she has remained for few years in the field of marketing as well. Her suggestions and advice for investments have been very useful to many people.
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