Banks finance you to buy, repair/renovate your house. Home loans are sanctioned based on the market value of your house, mainly an estimation given by banks, or the registration value of the property. Banks do not consider other charges like Stamp Duty, Registration Charges and so on while sanctioning the home loan.
The important documents to be submitted for approving your home loan are:
Identity proof
Residential proof
Properly filled loan application form
Photograph.
Sale agreement.
Last 6 months bank statement.
For business applicants documents describing the type of business, and IT returns.
For salaried applicants last 3 month's salary slips and Form16A.
Banks are competing with each other to offer you, low interest rates. Women customers are offered a discount on interest by most banks.
You and your spouse can together, avail a joint home loan. You get a higher amount of loan and also save on tax.
You don't have to wait till you are old, to own a house. You have a sense of accomplishment, as you are the owner of a house, in your youth.
Tax deduction up to INR 1.5 Lakhs, on EMI principal of the home loan. Tax deduction up to INR 2 Lakhs a year on EMI Interest.
Age
The minimum age if you are a salaried person to avail a home loan is 21 years and the maximum age at loan maturity is 60 years. For a self employed individual the minimum age is 21-23 years and the maximum age at loan maturity is 65 years.
Income
Banks sanction a home loan up to 60 times your net monthly income based on age and tenure of the loan. A home loan can be sanctioned even up to 1 crore and in some cases 5 crores.
Check your eligibility criteria and the interest rate charged on the home loan.
You need to maintain a good credit score with CIBIL in order to get your home loan sanctioned and avail your home loan at a lower interest rate.
You do not have to pay a prepayment penalty on the floating rate home loan.
You do not have to pay foreclosure charges on floating rate home loans.
Banks charge you around 0.5-1% of the total home loan amount you apply as a processing fee. This is a non refundable amount and is not returned even if your home loan is not sanctioned.
If your bank has reduced rates for new borrowers, and if you, an existing borrower with a high credit score are charged a higher rate, you can approach the bank using the balance transfer as a bargaining chip in order to secure a lower rate from the bank.
Banks conduct a legal check on your documents namely the title deed, the sale deed as well as the encumbrance certificate to validate their authenticity and make sure the home/land does not have any pending dues associated with it.
Have your home/apartment constructed by a reputed builder/developer as they are well versed with the banks legal and due diligence processes which makes a home loan easier to avail.
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