Monthly Payment (EMI)
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:
Properly filled loan application form
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.
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.
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.
Home loan is financed by banks to buy or repair/renovate a house. Home loans are provided based on the market value, mainly estimation given by banks or the registration value of the property. Banks do not consider other charges like Stamp Duty, Registration Charges, etc. while considering the home loan.
Repayment of the Home Loan : Home loans are repaid through monthly installments (EMI) spread over over 20 years. Some of the banks provide housing loans for a tenure extending up to 25 - 30 years.
Types of Interest rates on Home Loans : Home loan in India can primarily be classified into two categories on the basis of interest rates i.e. Fixed rate and Floating rate of interest.
There are very few lenders in India who offer pure fixed rates where the rate of interest remains constant for the entire tenure of the home loan. In floating home loan type, the rate of interest on such loans is subject to change whenever there are changes in base rate of the bank.
Processing fees for Home Loans : This fee is charged by the bank for processing the home loan and is not refundable. This generally varies in the range of 0.5 to 1% of the total home loan amount. However being charged for processing fee doesn't mean that the loan is passed.
Prepayment fees for Home Loans : Prepayment fee would be applicable if one is planning to pay the balance amount or planning to switch the loan to a different bank. Few of the banks offer no prepayment charges in case the prepayment is done from self.
Tax Benefits : Home Loans are an excellent option for getting Tax benefits under Section 80C.
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This is the rate of interest that fluctuates according to the market lending rate. This means you would be benefitted in the event the rates go down or stand the risk of paying more than you budgeted for in case the lending rate goes up.
This is the rate of interest that does not fluctuate according to the market lending rate. This means you withstand against the risk of paying more than you budgeted for in case the lending rate goes up. Your interest is always fixed.
Home loans are usually accompanied by the following extra costs: 1. Processing Charge: It's a fee payable to the Bank/FIs 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. 2. Pre-payment Charges: When a loan is paid back before the end of the agreed duration, a fee is levied by some banks/companies, which is usually between 1% and 2% of the outstanding loan amount. 3. 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. 4. Miscellaneous Costs: It is quite possible that some lenders may levy documentation, legal charges, technical charges etc in the absence of processing fees. 5. Registered mortgage deed or Creation of Memorandum of Understanding/Entry: Stamp duty payable on this will have to be paid by customer.
Most lenders would consider any property bought during the last 3 -6 months as a regular home loan application. You would be eligible for the same rates and income tax benefits as any other home loan. However, if you delay and the property purchase becomes more than 6 months old it will be treated as Loan against Property. The rates for the same are higher and there would be no tax benefits as well.
No, currently no home loan lender provides loan for purchasing properties abroad. The primary reason being operational difficulties in property verification, disbursement and different legal structure governing both home loan and repossession terms.
Yes, you can have as many loans against different properties. The only criteria being that you should be able to repay all the EMIs every month.
Yes, you can convert floating rate home loan into a fixed rate one with no extra charges. However, to convert a fixed rate product to a variable rate product, most banks will charge a small fee. The swap can be done any number of times and at any point of time. To know more on Home Loan, call us on 080 67974000
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