Mortgage on land is funded by very few institutions. As a result of this increased risk, interest rates are typically higher than those for traditional mortgage financial services, and the financial service-to-value (LTV) ratio for land mortgages usually ranges from 45% to 60% of the total cost of the plot.
When seeking LAP, it is essential that the plot falls within the limit of the municipal or local development authority. This ensures that the property is legally recognized and adheres to zoning and development regulations set by the governing body.
Tax Benefit : There is no tax benefit for both purchase and mortgage of plots.
Properties intended for land mortgages must meet specific criteria, such as being located within municipal or local development authority limits.
While LAP offers a viable solution for leveraging your property for funds, it's crucial to assess the criteria required for approval and comprehend why interest rates may be higher than traditional land mortgages.
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