BANKING AFFAIRS

Detailed explanation-1: -A loan against property is actually a mortgage loan. In this, a borrower can pledge his existing, self-owned property for a sum of amount that equals a particular percentage of the market price of the property he owns.

Detailed explanation-2: -A mortgage is an agreement between you and a lender that gives the lender the right to take your property if you fail to repay the money you’ve borrowed plus interest. Mortgage loans are used to buy a home or to borrow money against the value of a home you already own.

Detailed explanation-3: -Put simply, collateral is an item of value that a lender can seize from a borrower if he or she fails to repay a loan according to the agreed terms. One common example is mortgage loans. Normally, the lender will ask you to provide your home as collateral.

Detailed explanation-4: -In the case of a mortgage, the collateral is the home, also referred to as “real property.” When determining whether to approve your loan, the lender will order an appraisal of the home to ensure that the property-the collateral-is actually worth what you propose to pay for it with the loan.

Detailed explanation-5: -The word mortgage comes from the Old French word “morgage”, which directly translates to “dead pledge”. (The prefix of the word, “mort”, means dead, while the suffix, “gage”, means pledge.)