Key Terms and Conditions Associated with Mortgage Loans
Your residential or commercial property can be used as collateral to obtain a loan, with the lender deciding the loan amount based on the market value of the property, as well as your income and credit profile.
The loan-to-value (LTV) ratio is a crucial factor, with borrowers typically able to obtain 60% to 80% of the property value as a mortgage loan, depending on the lender.
Cost of Borrowing
This refers to the interest rate, which can be either fixed or floating.
- Fixed interest rate: The rate remains the same throughout the loan tenure, although fixed rates may be higher than floating rates.
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Author's summary: Mortgage loans have key terms and conditions.