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