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6 Types of Mortgage Loans Perfect for New Loan Seekers

Posted on the 04 June 2020 by Meet Rv @wemeetrv

A mortgage is a financial tool for debt protected with collaterals. These types of loans are beneficial for individuals to meet their personal and professional needs. Provided to both salaried and self-employed professionals, these loans are given against residential and commercial properties.

As compared to personal loans, mortgage loan interest rates are much lower. And, the duration is longer than the latter, which makes it the most viable option for the borrowers.

Types of mortgage loans for new loan seekers

Nowadays, various kinds of mortgage loans are available in the market. This is why new loan seekers face difficulties while choosing the most suitable deal. Here we have explained six main types of mortgage loans that are perfect for new borrowers.

1. Simple mortgage loans 

In a simple mortgage loan, you avail a loan against your personal property. And, the ownership of the property is not delivered to the lender. You are required to repay the loan amount after an agreed duration. However, on failing timely reimbursement of the loan, the lender has the right to repurpose your land.

2. Usufructuary loans 

A usufructuary loan is another kind of mortgage loan where the mortgagor passes the ownership of the property or binds himself to give the possession to the mortgagee. Unlike other mortgage loans, the lender gets the right to enjoy the income, such as rent and profits, from the property until the debt is repaid.

3. Mortgage by conditional sale 

Mortgage by conditional sale is a loan in which the mortgagor ostensibly sells the collateral property in the following conditions:

  • If the mortgage amount is still unpaid on a certain date
  • If the sale of the mortgaged property does not hold any value
  • If the lender re-assigns the ownership of the property to the lender

4. Title deed deposited mortgage loan 

Also known as an equitable mortgage, this type of mortgage loan involves transferring of the mortgaged property to an agent and mediator and then availing a loan against it. Here, the mortgagee has no legal right to take the possession of the property or the income accruing from the land. Mortgage by deposit of title deeds has the following requisites:

  • There must be a debt
  • Deposit of the title deed with the lender
  • The deposit should be with the intention that the said title deed shall be security for the loan

5. English mortgage 

In this type of loan, the mortgagor binds himself to repay the loan amount on a certain date fixed by the lender. The borrower absolutely transfers the property to the mortgagee. However, this is given on the condition that the lender will retransfer the land to the mortgagor upon the full repayment of the mortgaged amount.

6. Anomalous mortgage

An anomalous mortgage loan is a mix and match of various types of mortgage loans, such as simple loan, mortgage by conditional sale, English mortgage, usufructuary loan, etc.

Bottom line 

Since the mortgage loan amount is much higher than other borrowing options, individuals can avail these loans to handle several unforeseen situations that demand urgent funds. However, before you choose a particular scheme, compare the various mortgage loan options available to grab the perfect deal at reasonable interest rates.


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