Owning a home of own is a dream for every person. Lots of people go for any bank loan in the case they can not afford to pay the full price of a house. Banks and other financial institutions offer home loans to people who meet the required eligibility.
Due to the booming Indian economy, there is a lot of competition among banks to offer various kinds of retail loans to people. They keep cutting interest rates and keep offering attractive terms and conditions to lure customers towards the banks.
However banks do no offer loans to everyone. You need to have certain qualifications for getting a home loan. The eligibility criteria are related to your age, income, past repayment history and the cost of the property. It also considers your work experience, number of dependents, spouse's income, stability of income and employment, assets, liabilities, etc. Banks normally lend up to 3-4 times the annual gross income as a home loan. Every bank has its own set of eligibility criteria that may differ slightly.
Banks need certain documents at the time of applying for a home loan. The types of documents may vary, though normally these include proof of age, proof of identity, proof of residence, salary slip of last three months along with salary certificate, proof of continuity in job for last two years or Form 16, bank statement for last six months, proof of business address in respect of businessmen, etc.
There are eligibility criteria that have to be met for getting a home loan. You can not get any amount of home loan irrespective of your income. The amount of loan given by financial institutions depend on lots of factors, including your income, age, qualifications, work experience, number of dependents, spouse's income, stability of income and employment, assets, liabilities, etc. Normally banks like to lend up to 3-4 times the annual gross income as a home loan.
Yes, but most banks allow only immediate relatives to co-own a property. This means that only a parents-son combination and a husband-wife combination are allowed. The reason for this restriction is that if some dispute arises between the joint borrowers, their incomes might not be pooled any longer and there might be a problem in repaying the loan to the bank.
No, currently no financial institution provides loan for purchasing a house abroad.
Yes, you can get loan for purchasing land as far as it is only for residential purposes only. Some banks offer up to 85% of the purchase amount based on your credit profile and paying capacity.
Yes, various banks offer home loan to Non Resident Indians for buying a property in India.
Some real estate builders get their housing projects "pre-approved" by specific home loan lenders. These lenders examine the legal documents of the title of that project, the stage of construction as well as the builder's track record to complete the project in time. It then declares all properties in the project to be "pre-approved".
In a fixed rate home loan the interest rate on home loans charged by the bank is constant over the tenure of the loan. You should go for a fixed rate only if you feel that the rate of interest prevailing in the market have touched rock bottom and the rates can only move upwards
In a floating rate home loan the home loan interest rate charged by the lender keeps changing with respect to the rates in the market over the tenure of the loan. Normally the rate charged is on the basis of their cost of funds and the prevailing market rates. These rates change periodically. Accordingly the tenure increases or decreases or alternatively the EMI increases or decreases based on whether the rates move upwards or downwards.
Yes, you can convert floating rate home loan into a fixed rate one with no extra charges. However, banks charge a small fee for converting a fixed rate product to a variable rate product. The swap can be done any number of times and at any point of time.
Most private banks do not refund the fees that you pay to them if you cancel the loan after taking the offer letter from them. However, some Govt undertaking banks do refund the fee partially or fully.
Almost all lenders charge certain administrative or processing fees apart from interest for providing a home loan in India. These charges include legal fees, technical fees, stamp duty and prepayment charges
You can claim both the interest and principal components of your repayment during the year. Interest can be claimed as a deduction under Section 24 and you can claim up to Rs. 150,000 or the actual interest repaid whichever is lower. You can also claim tax benefits for principal up to the maximum of Rs. 100,000 under Section 80C.
No. fluctuating value of the property does not affect the EMI or home loan liability.
It is advised to buy insurance as your home would be one of your most valuable assets. However, most banks do not stress on this issue.
Yes, the property can be sold after getting consent of the lending bank. This consent letter by the bank usually mentions the amount at which the home loan can be considered fully paid off. This amount is inclusive of prepayment charges as applicable and calculated at a future date to give you enough time to find a buyer.
Yes, the loan amount can be changed any time before disbursement. Any increase in loan amount will however be subject to the eligibility conditions. The bank might also charge you excess fees on requesting an increase in the loan amount. However, the bank is not obliged to return excess fees paid in case you are requesting for a reduction in the loan amount.
