Right Mortgages For Contractors, What To Look For?
The banks and other financial institutions always seek for the right mortgage of
the property against the security of its finances which is considered as very authentic in the court of the law if customer failed to fulfil the agreement of finance on mark up basis.
Though the banking institutions look at your financial standing, most importantly for them is where you work, how long you have been there, and how likely it is that you will stay in that job and be able to regularly make your payments. This makes it very difficult for people who actually work for themselves and have their own businesses. Contractors suffer most because they cannot prove their financial status due to their monthly income changing each month. This makes it very difficult for mortgage brokers and financial institutions to actually approve them.
Some other formalities like checking of his income tax returns to know that whether customer is a tax payer or non tax payer is also compulsory. Mortgage has usually been considered by the financial institutions and banks at the time of financing to the borrower as a security of the borrowed funds. Property has been got mortgaged by the banks as security along with the agreement that in case of default the same has been disposed off through auction for the adjustment of outstanding liability of the borrower.
To know that the said mortgage will be in favour of the bank or financial institutions all the property document are being checked by the layer working on the panel of the bank who will not only check the authenticity of the same from its concerned department but also gives his opinion in the matter. There are two types of mortgages that have been usually executed by the bank for the security of the finance i.e. equitable mortgage and registered mortgage. Some specified percentage of the property has been mortgaged as registered mortgage and remaining portion of amount along with the mark up has been taken as the equitable mortgage.
Some other securities have also been taken by the bank other than the mortgage of the property. For example financing has also been sanctioned on the basis of hypothecation or pledge of the stocks of the firms or companies. This procedure has been adopted in sanctioning the limits of running finance. Residential properties are being mortgaged for obtaining the home finances while commercial finances could be obtained by getting mortgaged any kind of property like residential, commercial or agricultural land.
