|
Housing Loans
•
Eligibility
(i)
Home Loan
1.You must be at least 21 years of age when the
loan is sanctioned.
2. The loan must terminate before or when you turn 65
years of age or before retirement, whichever is earlier.
3. You must be employed or self-employed with a regular
source of income
(ii)
Office premise loan
1. You must be at least 21 years of age when the loan
is sanctioned.
2. The loan must terminate before or when you turn 65
years of age.
3. You must be self-employed with a regular source of
income.
4. The loan can be for the purchase / construction /
extension of a non-residential property.
5. A loan for renovation or improvement will be given
only at the time of acquisition of property.
6. Professionally qualified and self-employed individuals
can apply.
7. A minimum of 3 year's work experience is a must.
•
Loan Amount
A
number of factors are taken into account when assessing
your repayment capacity. Your income, age, number of
dependants, qualifications, assets and liabilities,
stability/ continuity of your employment / business
are some of them.
However,
there are ways by which you can enhance your eligibility.
1. If your spouse is earning, put him/her as a co-applicant.
The additional income shall be included to enhance your
loan amount. Incidentally, if there are any co-owners
they must necessarily be co-applicants.
2. Did you know that your fiancée's income can
also be considered for sanctioning the loan on your
combined income? The disbursement of the loan, however,
will be done only after you submit proof of your marriage.
3. Providing additional security like bonds, fixed deposits
and LIC policies may also help to enhance eligibility.
While
there is no need for a guarantor, it could be that having
one might enhance your credibility with us. If so, our
loan officer would provide you with the necessary details.
The final amount to be sanctioned will depend on your
repayment capacity. However, what you ultimately are
entitled to will have to conform within the limits fixed
for each loan.
Also, when the company looks at the total cost, registration
charges, transfer charges and stamp duty costs are included.
.................................................................................................
•
Sanctioning
(i)
Document
1. Passport size photograph.
2. Age verification: PAN card, Voters ID, Passport,
License.
3. Bank statement for the last six months.
4. Income Documents e.g. Latest Form 16, Certified IT
returns for latest 3 years.
5. Admin Fee cheque.
6. Loan Enclosure letter.
These
are the documents required for sanctioning a loan. You
may be asked to submit further legal documents if required
by the Bank or its approved lawyers.
Do
retain photocopies of all documents being submitted
by you.
•
Disbursement
Your
loan will be disbursed after you identify and select
the property or home that you are purchasing and on
your submission of the requisite legal documents.
While
you may be under the impression that the list of documents
asked for is rather extensive, please note that it is
for your own good. Each and every single document asked
for will be verified and checked to ensure your safety.
This
may take some time but we want to ensure a clear title
and will complete all the legal and technical verifications
to ensure that you have full rights to your home.
The
230 A Clearance of the seller and / or 37I clearance
from the appropriate income tax authorities (if applicable)
is also needed.
On
satisfactory completion of the above, on registration
of the conveyance deed and on the investment of your
own contribution, the loan amount (as warranted by the
stage of construction) will be disbursed by Bank.
The
disbursement will be in favour of the builder/seller.
(i)
List of documents for disbursement
Standard documents:
1. Loan Agreements
2. Disbursement Requests
3. Post-dated cheques
4. Personal guarantor's documents, as the case may be
Some
documents are specific to each case.
•
Repayment of Loan
(i)
What is the repayment tenure?
1. Home Equity Loans - Maximum loan tenure of
15 years.
2. Office premise loan - Maximum loan tenure of 15 years.
3. Home loan - Maximum loan tenure of 30 years.
(ii)
How is the loan repaid?
All loan repayments are done via equated monthly
instalments (EMI).
(iii)
What is an EMI?
An EMI refers to an equated monthly instalment.
It is a fixed amount which you pay every month towards
your loan. It comprises of both, principal repayment
and interest payment.
(iv)
When does the repayment start?
EMI payments start from the month following
the month in which the full disbursement has been made.
(v)
How is the EMI paid?
The EMI is to be paid every month through post-dated
cheques (PDCs) or direct deductions from your salary.
If you are opting for PDCs, then you will have to provide
36 upfront. The PDCs are to be dated on the 1st of every
month. However, if you receive your salary a few days
later, no problem. There are some flexibilities of dating
the cheques, which depands on that financial institution's
rules & regulations.
(vi)
What if a PDC bounces?
In the case of a bounced cheque or delayed payment,
charges and outstanding dues will be charged as per
the prevailing company policy. You can replace old PDCs
with new ones within 5 - 7 working days.
(vii)
What is pre-EMI interest?
In the case of part disbursement of the loan,
monthly interest is payable only on the disbursed amount.
This interest is called pre-EMI interest (PEMI) and
is payable monthly till the final disbursement is made,
after which the EMIs would commence.
(viii)
When do I pay PEMIs?
The first PEMI is payable by cheque by the end
of the month in which the disbursement is madeand each
subsequent PEMI at the end of every month till the commencement
of EMI.
(ix)
When does the repayment start?
EMI payments start from the month following
the month in which the full disbursement has been made.
.................................................................................................
•
Application Process
The
moment you decide to buy a home, you can put in your
application. Yes, you can apply for a loan even before
you have selected the property.
The
property need not even be in the same city where you
are residing.
Should there be a change in your financial status or
plans, you can withdraw your sanction within 6 months
of approval
•
FAQ's
Q.1
What is the minimum loan amount?
A. You can get a home loan starting from Rs. 2 lakh
(Delhi, Mumbai & Bangalore Rs. 3 Lakhs). The loan
amount depends on your repayment capability and is restricted
to a maximum of 85% of the cost of the property or the
cost of construction as applicable. Repayment capacity
takes into consideration factors such as income, age,
qualifications, number of dependants, spouse's income,
assets, liabilities, stability, continuity of occupation
and savings history.
Q.2
What are the loan tenure options?
A. You have the option of selecting a term you are comfortable
with, ranging upto 20 years, provided the term does
not extend beyond your reaching 65 years of age or retirement
age, whichever is earlier.
Q.3
How is the interest charged/calculated?
A. There are two schemes,
1. Fixed Rate Home Loans
2. Adjustable Rate Home Loans.
If
you opt for an Adjustable Rate Home Loan, the interest
rate would vary with the Bank Home Floating Reference
Rate. Under the Fixed Rate Home Loans the rate applicable
on the date of disbursement remains fixed during the
entire duration of the loan.
Q.4
How much time will it take for my
loan to be approved?
A. It takes a week for your loan to be sanctioned after
you have submitted all the documents.
Q.5
Who can be the co-applicants
for the loan?
A. You could include your spouse as a co-applicant for
the loan and we shall include his/her income to enhance
your loan amount. Further, in case there are any other
co-owners they also need to be co-applicants.
Q.6
Is a personal guarantor a must?
A. No, there is no personal guarantor required in most
cases.
Q.7
What security/collateral do I
have to provide?
A. Typically the security for the loan is a first mortgage
of the property to be financed, by way of deposit of
title deeds and/or such other collateral security as
may be necessary. The title to the property should be
clear, marketable and free from any encumbrances.
Q.8
What are the stages involved
in taking a loan?
A. There are two main stages:
1. Sanction of the loan, whereby you get an approval
for a specific loan amount based on the value of your
property and repayment capabilities.
2. Disbursement of the loan amount.
Q.9
What are the various types of
loans available?
A. 1. Home Loans
2. Land Loans
3. Home Equity Loans
4. Office Premises Loans
All
of these are available on an adjustable rate or a fixed
rate.
Q.10
What is a Monthly Reducing balance?
A. An Equated Monthly Installment (EMI) has 2 components,
interest and principal. When the interest is calculated
on monthly rests, the principal on which the interest
is charged goes down every month. This results in a
significant saving for the customer over the tenure
of the loan.
Q.11
What is an Annual Reducing balance?
A. An Equated Monthly Installment (EMI) has 2 components,
interest and principal. When the interest is calculated
on annual rests, the principal reduces only at the end
of the year. Therefore, you continue to pay interest
on a portion of the principal that you have already
actually paid back to the lending company.
Q.12
When can I apply for a loan?
A. You can apply for a home loan even before you have
selected your property. The loan amount would be sanctioned
or approved for you, based on your repayment capability.
Q.13
When will the loan be disbursed?
A. Your loan will be disbursed on:
1. Your identification and selection of the property.
2. Submission of the legal documents.
3. Legal and technical clearance of the property
4. Investment of your contribution towards the property
Q.14
What is an amortization schedule?
A. An amortization schedule is a table giving the reduction
of your loan amount by monthly installments. The amortization
schedule gives the breakup of every EMI towards repayment
interest and outstanding principal of your loan.
Q.15
What are the tax benefits of
taking a home loan?
A. The tax benefits on a home loan, under the Income
Tax Act, are two-fold:
1. Principal repaid : Rebate under section 88 (2) of
the Income tax Act is available to individuals on repayment
of the principal portion as given below
| Gross
total income before deduction |
Rebate
available |
| Upto Rs.1,50,000 |
20% |
| More than Rs.1,50,000
but not exceeding Rs. 5 lakh |
15% |
| More than Rs.5 lakh |
none |
Moreover,
the rebate is allowed up to the maximum limit of Rs.20,000
per financial year on the repayment of the principal
sums, which need not be out of income chargeable to
tax of the year in which such repayment is made.
2. Interest repaid: Under section 24 of the Income Tax
Act , in case of self-occupied property, deduction is
allowed up to Rs.1,50,000 per annum for houses acquired
or constructed with capital borrowed after March 31,
1999 as long as the acquisition or construction is completed
within 3 years from the end of the year in which such
loan is taken.
Q.16
Can I get IT certificates in
the name of both the Applicant and co-Applicant separately?
A. As per the IT rules only one certificate can be issued
for a home loan and hence one certificate will be issued
in the name of both applicant and co applicant.
Q.17
When is the IT certificate issued?
A. The IT certificate will be issued at the end of a
financial year. You can expect to receive your copy
of the IT certificate in the month of April or May.
Q.18
How can I get the tax benefit during
the year?
A. You can request for a provisional IT certificate
that can be issued any time during the course of the
year.
General
details of Home Loans, may vary case to case
................................................................................................
| 
Resources 