How Does a Mortgage Loan Work? Explained in 7 Easy Steps

How Does a Mortgage Loan Work? Explained in 7 Easy Steps

If individuals do not have a substantial amount of cash with them for any payment but they do have a property they can offer as a collateral, they can take the help of a mortgage loan. In India, Mortgage loan is more commonly referred to as a loan against property. 

A more detailed definition of mortgage loan-

Here is a guide on what is a mortgage loan and how it works. A mortgage loan or a loan against property is a type of loan that individuals can get to meet any of their financial needs by keeping a property as collateral. The mortgage loans do not have an end-usage restriction, so individuals can use it for any financial requirement.

Steps to avail a mortgage loan

Step#1: Begin by filling out the application form

Individuals should begin their application process by filling out the application form with information about their pledged property and current employment status. Most lending institutions now offer online application forms to make it easier for borrowers. However, ensure that the information filled in is correct, as these will be verified in later procedures.

Step#2: Confirm the details provided

After filling out the form, a representative will contact the applicants for verification of the information. Moreover, the credit score of individuals will be checked.

Step#3: Submit the required documents

This step will require applicants to submit documents verifying the information provided and proving their eligibility for a loan against property. A few common documents applicants need to submit include address proof, identity, income, and property papers. However, this list will vary according to different lenders, and it would be better if applicants check for the necessary documents from the respective websites.

Step#4: Wait for the verification

After submitting all the necessary documents, the lending institution will verify them. This will include verification of the personal, employment, income and property details. In addition, some lenders might also request a face-to-face verification of the applicant or send a representative to the applicant’s office or home for enhanced authenticity.

Step#5: Receive the sanction letter from the lender

After completing the validation process, applicants will receive an offer for a loan against property. This will imply that the lending institution has verified the authenticity of the documents the borrower has submitted and considers the applicant creditworthy. Furthermore, applicants can check the loan terms at this stage.

Step#6: Wait for the property evaluation and legal check

The lender will start the second verification phase when borrowers accept the offer. This stage will involve systematic evaluation of the property and related papers using on-ground channels and legal methods. This step is necessary to check if the property is under any legal dispute and has everything specified in the documents.

Step#7: Receive the funds in the account

Once the entire verification process is complete, the lending institution will proceed with the final disbursal. The time required for final disbursal will vary according to different lenders. 

Now that individuals know what a mortgage loan is and the procedure they need to follow to get it, they should also start planning their finances accordingly.

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Since a mortgage loan is a long-term financial commitment, planning their finances in advance will help borrowers maintain their lifestyles. To anticipate their monthly expenses, they can use mortgage loan EMI calculators, which are available on the websites of lending institutions. These property mortgage loan emi calculators are easy to use, free and accessible from anywhere.

Before finalising on a lender, borrowers should compare the interest rates, loan disbursal times, and flexibility of repayment tenors. Advancing ahead, individuals should discuss with lending institutions about floating interest rates and fixed interest rates and which works best for their LAP.

Individuals planning to take a  mortgage loan or loan against property would be delighted to know that several lending institutions offer pre-approved loans to their customers. These offers are available on several secured and unsecured products and further simplify and accelerate the loan process. To check their pre-approved offers, borrowers can enter their names and contact details on the required section of the websites.


In conclusion, that is all about what a mortgage loan is and how borrowers can get it. Due to it being a secured loan, the risk factor of this form of credit is generally low. Applicants thus get to enjoy low-interest rates on these loans.

Most borrowers who don’t have access to large sums of cash to purchase a property outright depend on mortgages to complete their home purchases. Whatever your situation, there are numerous types of mortgage loans accessible. More people can now qualify for mortgages and realise their dream of home ownership thanks to several government-sponsored programmes. There are multiple sources that provide mortgages. Home loans are frequently offered by banks and credit unions. There are also specialised mortgage firms that only work with mortgages for houses.


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