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How
much housing
loan can one
get?
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Housing
loan will
be sanctioned
depending
upon your
repayment
capacity and
according
to your income.
Your spouse's
income can
be included,
if you want
to increase
the amount
of your loan.
The maximum
loan that
can be sanctioned
varies with
housing finance
companies
and ranges
from Rs.10
lakh to Rs.1
crore. |
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What are the
incentives offered
by lending institutions?
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Some
of the lending
institutions
sanction the
loan without
requiring you
to identify
property as
a prerequisite
for eligibility |
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Free accident
insurance |
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Discounts |
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Waiving of
pre payment
penalty |
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Waiving of
processing fee
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Free property
insurance |
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What
is the best
way to select
the cheapest
Home Loan?
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Keep
the loan period
constant and
calculate
the total
amount paid
for the home
through the
different
loan options
available.
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Which
loan is cheaper
the monthly
reducing balance
or the annual
reducing balance?
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You
can compare
the EMIs and
the tenures
of the two home
loans. The loan
carrying the
lower EMI for
the same tenure
is the cheaper
option. |
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What
are the other
costs that usually
accompany a
home loan? |
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Home
loans are
usually accompanied
by the following
extra costs:
Processing
Charge:
this is a
fee payable
to the lender
on applying
for a loan.
It is either
a fixed amount
not linked
to the loan
or may also
be a percentage
of the loan
amount. The
loan amount
required by
you cannot
be less than
the processing
fee.
Pre-payment
Penalties:
When a loan
is paid back
before the
end of the
agreed duration,
a penalty
is charged
by some banks/companies,
which is usually
between 1%
and 2% of
the amount
being pre-paid.
Commitment
Fees:
Some institutions
levy a commitment
fee in case
the loan is
not availed
of within
a stipulated
period of
time after
it is processed
and sanctioned.
Miscellaneous
Costs:
It is quite
possible that
some lenders
may levy a
documentation
or consultant
charges.
Registration
of mortgage
deed.
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How
do HFCs decide
on the loan
amount? |
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Several
companies
give up to
a maximum
of 85% of
the cost of
the house.
Sometimes,
the remaining
15% called
'seed money'
will have
to be provided
by the loan
applicant.
The eligibility
of the applicant
is determined
by the age,
income, no
of dependents,
monthly expenditure
and repayment
capacity.
This varies
from case
to case. |
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Are
securities required
for home loans?
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In
most cases,
the property
to be purchased
itself becomes
the security
and is mortgaged
to the lending
institution
till the entire
loan is repaid.
Some institutions
may ask for
additional
security such
as life insurance
policies,
FD receipts
and share
or savings
certificates. |
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Do
I require a
guarantor to
get a home loan?
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Some
institutions
ask for 1
or 2 guarantors,
others require
no guarantor
at all. |
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What
is pre-EMI interest? |
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Pending
final disbursement,
the interest
you pay on the
portion of the
loan disbursed
is called pre-EMI
interest. Pre-EMI
interest is
payable every
month from the
date of each
disbursement
up to the date
of commencement
of EMI. |
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What
is the right
time to apply
for a home loan?
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You
may apply for
a loan before
or after selection
of property.
The loan amounts
are sanctioned
in principle
to let you know
what amounts
you can avail
of. This helps
you to decide
your budgets
and purchasing
power. Actual
disbursements
are made after
satisfactory
verification
of all necessary
documents and
completion of
specific procedures.
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What
is the time
required for
loan application
approval? |
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Approximately
15 days and
sometimes it
may exceed a
month. It varies
from case to
case under different
circumstances. |
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What
is the time
required for
loan disbursement? |
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On
an average,
loans are disbursed
within 3-15
days after satisfactory
and complete
documentation
and completion
of all relevant
procedures,
including proof
that 15% of
the cost has
been paid upfront
to the seller
of the property.
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Can
I make joint
applications
for home loans?
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Most
institutions
are willing
to consider
the joint incomes
of the applicants
for deciding
the loan amount.
Some institutions
do not require
the co-applicants
to be co-owners
of the property
to be purchased.
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On
what basis is
the amount of
the home loan
decided? or
on what basis
a capacity of
a person to
repay the loan
is evaluated?
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The
amount of home
loans granted
by various financial
institutions
generally is
between Rs.
2 lakhs to Rs.
1 crore and
between 70%
and 100% (under
special schemes)
of the purchase
price. The amount
of the loan
for each individual
depends on the
following factors:
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The income
of the family
applying for
the loan |
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Age of the applicant
for retirement
or years left
for completing
65 years |
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Number of
dependants |
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Qualifications |
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Assets and
liabilities |
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Stability/
continuity of
the employment/
business of
person applying
for a loan.
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Does the Agreement
for Sale have
to be registered? |
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In
many states
in India, the
Agreement for
Sale between
the builder
and purchaser
is required
by law to be
registered.
You are advised,
in your own
interest to
lodge the Agreement
for registration
within four
months of the
date of the
Agreement at
the office of
the Sub-Registrar
appointed by
the State Government,
under the Indian
Registration
Act, 1908. |
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Are
there any restrictions
on transfer
of immovable
properties? |
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In
terms of Chapter
XX C of the
Income Tax Act,
1961, the Central
Government has
the first option
to purchase
certain immovable
properties exceeding
certain value
and as such
transactions
covered by this
Chapter can
be proceeded
with only after
complying with
the requirements
prescribed therein. |
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Does
the property
have to be insured? |
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You
will have to
ensure that
the property
is duly and
properly insured
for fire and
other appropriate
hazards, as
required by
the bank, during
the pendency
of the loan
and to produce
evidence thereof
to the bank
each year and/or
whenever called
upon to do so.
The bank should
be the beneficiary
of the insurance
policy. |
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Will
the bank assist
me in selecting
accommodation
of my choice? |
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The
concerned bank
will assist
you in finding
the property
of your choice.
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Are
these policies
subject to change? |
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Yes.
These policies
will be reviewed
periodically. |
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Will
the bank finance
persons of Indian
origin holding
foreign passports? |
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As
per current
guidelines of
the Reserve
Bank of India
persons of Indian
origin holding
foreign passports
are eligible
for loans with
the bank. |
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How
is my loan reassessed
if there is
a change in
status from
Non-Resident
Indian to Resident
Indian? |
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The
repayment capacity
of the applicant(s)
based on Resident
status is reassessed
and a revised
repayment schedule
worked out.
The new rate
of interest
will be as per
the currently
applicable rate
of Resident
Indian loans
(for that specific
loan product).
This revised
rate of interest
would be applicable
on the outstanding
balance being
converted. A
letter is given
to the customer
confirming the
change of status. |
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Can
I get a Home
Loan that is
both Fixed and
Floating? |
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The
bank offers
you 2-in-1 Home
Loans. This
facility helps
to hedge the
interest rate
risk of the
customer to
a large extent.
By breaking
the loan up
into two separate
loans, one can
customize the
loan. One part
has the features
of a fixed rate
home loan and
the other has
that of an ARHL. |
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Buyers
/ Sellers 
