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What is the Difference Between Equitable Mortgage and Registered Mortgage?

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  • What is a Registered Mortgage?

  • What is an Equitable Mortgage?

  • Equitable Mortgage vs Registered Mortgage

A mortgage loan is not the same as a home loan, and in fact, is a term can be used interchangeably with loan against property. In such type of a debt instrument, a loan is sanctioned against a property collateral. In the advent of a failure to repay the loan, your lender is backed by law to repossess a property used in a mortgage agreement.

Bajaj Housing Finance offers different types of mortgage loans – equitable mortgage and registered mortgage. We recommend that you have a meaningful grasp of what the two mortgage loans mean and how they operate. Read on to learn more about the differences between equitable mortgage and registered mortgage

What is a Registered Mortgage?

A registered mortgage is when the borrower grants full rights of the property to the lender in the event of a loan repayment default. When this happens, it means that the borrower has permitted the lender to handle the property in whichever way they deem fit. This loan demands that the sub-registrar assents the loan before the agreement can be completed. Thereby, the borrower and lender decide to honour a code of terms and conditions which will run for the loan's duration. This is usually determined by a third party. 

Note that this only happens when you do not meet up with your repayment. It is a loan type that demands lots of attention, and the bank bears various claims to the property that a simple mortgage loan does not allow.

A quick tip: To secure a registered mortgage loan, the applicant is mandated to make a declaration on the property and this is done with the sub-registrar via a written document that serves as evidence of transfer of interest to the lender as security for the loan. Another name for the registered mortgage is the “Deed of Trust”. 

What is an Equitable Mortgage?

Now that you understand the respective meanings of equitable mortgage and registered mortgage, it's time you learned about the differences between equitable mortgage and registered mortgage.

A quick tip: the differences are determined by several factors which include: 

  • Registration
  • Process
  • Cost Involved
  • Affordability
  • Bank's Rights
  • Risk

Now that you're acquainted with the factors that determine these differences, here are the things that differentiate an equitable mortgage from a registered mortgage.

Equitable Mortgage Registered Mortgage
Registration: It does not undergo registration. Registration: It is subject to registration.
Process: To secure an equitable mortgage, you must purchase stamp paper. Process: In a registered mortgage, a borrower has to reach the Sub-registrar’s Office first.
FCost Involved: It demands 0.1% or 0.2% of the home value. Cost involved: It requires %% of the home value.
Affordability: It is less expensive. Affordability: It is more expensive.
Bank's Rights: The bank can repossess your property and possibly auction it if you fail to complete your loan repayment within the set period. Bank’s Rights: The bank reposses your property and reserves the right to do whatever they please with it.
Risk: It is less secure and has greater risk. Risk: It is more secure and has less risk.

Something to Note on the Difference between Equitable Mortgage and Registered Mortgage

Now that you know what both mortgage loans entail, their specifications, and their differences when compared, we recommend Bajaj Housing Finance for when you want to consider taking a mortgage loan. Click here for your equitable mortgage registration or registered Mortgage registration. For additional informal, queries, and further assistance, please don’t hesitate to contact our 24/7 customer service team.

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