A Full Guide to Getting a Mortgage Loan Against Land

People often have large dreams, like building a house, buying an apartment, or putting money into a business. But the truth is that most of the time, making these goals come true costs a lot of money. A lot of the time, just your savings or salary aren't enough. This is when a mortgage loan, which is borrowing money from a bank by putting up land or other property as collateral, becomes a good option.

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What is a loan for a mortgage?

A mortgage loan is a sort of loan that a bank or other financial organization gives out. The borrower promises to give up a permanent asset, like land, a house, or a building, as collateral. The bank still has this property as collateral.

In simple terms, you borrow money against a piece of property. When you pay back the loan, you get the property back. The length of these loans is usually between 5 and 20 years.

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Why Should You Get a Mortgage?

A lot of people want to know why they should get a mortgage. It's easy to see why. A mortgage loan might help you acquire a home or property even if you don't have enough money all at once. The best thing about this is that you don't have to sell your asset; you can just use it as collateral.

Advantages of a Mortgage Loan:

• Getting a lot of money all at once

• Paying back in small, manageable amounts

• Interest rates that are lower in comparison

• You can still use the property even when you have a mortgage on it

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How do you get a mortgage?

You need to do some things to acquire a mortgage loan:

1. Make a strategy for your money: Figure out how much you need, why you need it, and how you plan to pay it back.

2. Pick the right bank: Look at the terms, conditions, and interest rates of different banks and financial institutions. Pick the one that works best for you.

3. Send in an application: Fill up the bank's application form and send in the papers they need.

A mortgage counselor can also help you make the process go more smoothly and quickly.

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Who Can Get a Mortgage?

Not everyone can get a mortgage loan. Here are the essential requirements to be eligible:

• You have to be at least 21 years old

• You need to have a steady, provable source of income

• You need to own a property that can be used as collateral

• You need to meet the bank's requirements for income and credit score

For people with jobs, things like employment security, monthly pay, and the reputation of their employer are taken into account. Business owners must show proof of business continuity, trade permits, and financial documents.

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How Much Money Can You Borrow Against Your Property?

In Bangladesh, you can take out a mortgage on land, houses, buildings, or apartments that are being built. Banks normally provide you 50% to 80% of the property's current value, based on its market value. If your land is worth BDT 1,000,000, you could be able to get a loan for between BDT 500,000 and BDT 800,000.

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How long does it take to get a loan for a house?

It normally takes longer to process a mortgage loan than a personal loan. It can take anything from 30 to 45 days because they require valuing the property, checking the documents, and getting approval. The process could take considerably longer if there are problems or missing papers.

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Things You Need to Get a Mortgage Loan:

Here's a list of documents you need in general:

For All Applicants:

• A copy of your NID or passport

• Last twelve months of bank statements

• Certificate of tax clearance

• Bills for utilities including water, gas, and electricity

• Property papers that are original

• Papers for a loan arrangement

For People with Jobs:

• A salary certificate

• Certificate of employment

For Business Owners:

• A trade license

• Partnership deed (if you need one)

• Statements of finances

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Islamic View on Home Loans

In Islam, it is legal to take out a mortgage (rahn) if certain conditions are met. Shariah law says that lenders can't make money off of the property they have mortgaged. That implies they can't live in, rent out, or make money from the home they promised. But if the borrower doesn't pay back the loan, the lender can sell the asset to get the money back.

On the other hand, traditional banking often makes money off of these kinds of properties, which is not allowed under Shariah law. So, if you want a loan that follows Shariah law, it's best to go through Islamic banking.

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Final Thoughts

A mortgage loan is a strong financial tool that lets you borrow a lot of money for long-term purposes like building a home, buying property, or starting a business. You can pay it back in little amounts over time. But before you take out a loan like this, you need to have a strategy, know the bank's terms, and figure out if you can pay it back. If you want an option that follows Shariah law, look into Islamic banks.

In short, if you plan ahead and are careful, a home loan can help you reach your broader goals without having to sell what you already possess.