HOME LOAN SERVICE
Apply For Home Loan:
Housing sector is the 2nd biggest employment generator sector in India after the agriculture sector and this sector contributes about 5% to 6% of GDP for the Indian economy. People purchase a house for investment purposes as well as for living purposes. But purchasing a property is a costly affair and for most people, it is not possible to purchase a house with their own money. It is only possible with the help of Home Loan. The government is also very keen to promote this housing sector by providing several tax benefits on housing loans and pushing for a lower rate of interest.
For most people, arranging the money by themselves for purchasing a home is not possible. So with the help of a home loans, they are able to purchase a dream home or their investment property.
- With the marginal self contribution of about 10% to 20%, they are able to purchase their home.
- The customer has the option of starting the EMI after actual possession of the home. So EMI liability can differ till possession.
- Pre EMI interest is liable to be paid till possession.
- Tax Benefit – Clients save their tax by claiming the interesting part of EMI (under section 24 up to Rs 200000) as well as a principal part of EMI(under sections 80C up to Rs. 150000) thus reducing their overall tax liability.
In a real way, the home loan is the driving force behind the Indian Real Estate market growth. Since home loan plays an extremely vital role in the real estate market. That is the reason it is so crucial for home buyers as well as developers and builders.
Getting home finance is actually not very difficult task now these days. As long as borrower is eligible for it, such loan is usually made available. But there are many technical parameters and legal formalities related with home loan which needs to be understood.
|Documents||Salaried||Self Employed Professional||Self Employed Non-Professional|
|Application form with photograph duly signed||Yes||Yes||Yes|
|Identity, residence and age proof||Yes||Yes||Yes|
|Last 6 months bank statements||Yes||Yes||Yes|
|Last 3 months Salary-slips||Yes||Yes||Yes|
|Processing fee cheque||Yes||Yes||Yes|
|Form 16 / Income Tax Returns||Yes||Yes||Yes|
|Proof of business existence||Yes|
|Education qualification certificate and proof of business existence||Yes||Yes|
|Last 3 years Income Tax Returns with computation of Income||Yes||Yes|
Frequently Asked Questions
1) How much loan (% of property value) Bank give to me?
A bank usually lends approx. 80% of agreement value of a property, and the borrower has to provide the reaming amount as own contribution receipt (OCR). But some banks are willing to include stamp duty and registration charges also within the preview of the loan, thus technically, this makes the loaned amount more than 90% of the agreement value.
2) What is rate of interest for home loan?
The lending rate of the home loan vary from time to time depending upon the economic condition of the country and how much liquidity exist in the market. With the recent government announcement, the lending rate will change as per the repo rate announced by RBI. Also, the home loan rate will depend upon
- Profile of borrower,
- Amount of loan,
- Tenure of loan,
- Type of property.
- It will also vary from bank to bank.
3) Is insurance is compulsory while taking home loan?
Most banks insist that the borrower should take an insurance policy to protect the home loan (Home Loan Protection Plan). This is to ensure that if something goes wrong with bread earner or borrower, then the bank will be able to get its loaned amount back through an insurance policy. Also, the property can be handed over to the family of the borrower without any hassle. So it always advisable to take an insurance policy as a cover to the home loan liability
4) What will be charge if I close the loan before time?
As per RBI circular, banks are not allowed to charge any penalty on prepayment or foreclosure of the loan after certain time. However, a bank may charge a penalty on a fixed type of rate of home loan.
5) What is the maximum period for which I can take home loan?
Home loan tenure varies from 5 years to 30 years. But the tenure of the loan will depend upon bank policy. So it will vary from bank to bank. Also, it depends upon your age and your retiring age left. Some banks also consider pension period in the home loan tenure.
6) How many type of home loan available in market?
- Home purchase loan – Loan is given for buying a home( New or resale)
- Home Improvement Loan – For renovation and other domestic repair works.
- Home extension loan – For broadening / expanding area of the new home.
- Land purchase loan – Land purchase loan is generally given for land purchase plus construction over it.
- Balance transfer loan – It is available for transferring the home loan from a higher interest rate bank to a lower interest rate bank.
- Top up loan – To get an additional loans after taking the possession of the property at the same interest of rate.
Loan against Property (LAP) – Can avail loan on your existing residential or commercial property for fulfilling other financial need
7) What is EMI?
Equated Monthly Instalment (EMI) is the fixed amount of money that is payable to the bank every month until the full amount is repaid.EMI consist of the principal amount as well as interest amount. In the initial tenure of home loan, the interesting part is more than a principle part of EMI and slowly it will decrease. EMI amount depends upon the rate of interest, loan amount and tenure of the loan.
8) What are the eligibility criteria for home loan?
- Your income
- Your saving history
- Your qualification
- Your age
- Your stability in your occupation
- Your existing loan
- Income of co-applicant
- Any other liability
9) What is floating and fixed rate of interest?
- Floating rate of interest– These loans are linked to the benchmark rate. Hence, whenever a bank increases or decreases the benchmark rate, the interest rates of the loans will fluctuate and accordingly the EMI or tenure of the loan will increase or decrease.
- Fixed-rate of interest – A fixed Rate is decided at the time of loan approval and is fixed once for all and will not change in the future.
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