Home mortgage loan

Yes, you can legally use the funds from a Mortgage Loan (Loan Against Property / LAP) to purchase a small commercial shop, provided you disclose the end-use correctly during the loan application process.

When you mortgage an existing residential or commercial home to borrow money, banks classify this as a Loan Against Property (LAP) or Mortgage Loan.

The only banned uses for LAP funds are speculative/illegal activities (such as stock market trading, gambling, or unlawful trades). Using it to buy a commercial shop is 100% legal.

Originally posted by : T. Kalaiselvan, Advocate
	Yes, you can legally use the funds from a Mortgage Loan (Loan Against Property / LAP) to purchase a small commercial shop, provided you disclose the end-use correctly during the loan application process. When you mortgage an existing residential or commercial home to borrow money, banks classify this as a Loan Against Property (LAP) or Mortgage Loan. The only banned uses for LAP funds are speculative/illegal activities (such as stock market trading, gambling, or unlawful trades). Using it to buy a commercial shop is 100% legal.

Sir,

This given below condition is given online on bank website for Mortgage loan.

Purpose :-

1. For any purpose except for financial speculation of any nature.

2. Proposals from persons engaged in Real Estate Developments, Property Dealers /Brokers, Share / Stock Brokers and persons engaged in any Speculative activity shall not be considered.

What does mean of "Real Estate Developments" ? is it related to buying commercial property ?

Real Estate Development concept is inapplicable in your case, you may apply, proceed and obtain Bank loan to finance for buying a small commercial shop as per Bank rules.  

If your other home is bought by you through a registered sale deed, you can deposit the sale deed and can get a loan to buy a small commercial shop.  After repayment of the full loan, the bank executes cancellation of the deposit of the title deed

Originally posted by : kavksatyanarayana
	If your other home is bought by you through a registered sale deed, you can deposit the sale deed and can get a loan to buy a small commercial shop.  After repayment of the full loan, the bank executes cancellation of the deposit of the title deed

please tell this line in simple words "the bank executes cancellation of the deposit  of the title deed". 

There is no document like a title deed in our state.

"Actually I do not want any kind of dispute  in future with bank, nowadays bank officials have become liars."

You cannot deal with the banks or anyone or any institution in the society with such hyper-technical and overstated personal opinions. Law and its procedure assures you of a remedy as wnd when there are disputes.

@kavksatyanarayana: I think you are talking about MODT(Memorandum of Deposit of Title Deed)

@P.Venu sir, you are telling true

To purchase other property you can seek loan by mortgaging it.