Who is eligible for a home loan?

Any individual above the age of 21 years and below the age of 65 years, who is of Indian origin, Indian Resident and Non-Resident Indian can apply for a home loan. Apart from this, eligibility is calculated based on the factors such as age, income, qualifications, number of dependants, spouse's income, assets, liabilities, stability and continuity of occupation and previous credit history.

What is the maximum amount of housing loan that can be availed?

The usual margin is 85% of the total cost of the property inclusive of the cost of land. This maximum amount is subject to a sealing of Rs 1 crore.

What is the period in which I will have to repay the loan?

The period is fixed usually to a maximum of 20 years, but in all circumstances before one's retirement age.

How does one repay the loan?

The loan can be repaid in monthly installments, which usually commence after a month of the loan disbursement.

What is pre-EMI interest?

Pre-EMI interest is the interest paid on the portion of the loan disbursed, before final disbursement. This pre-EMI interest is payable every month from the date of each disbursement up to the date of commencement of the EMI.

What is the difference between fixed rate loan and floating rate loan?

A fixed rate loan is the rate of interest that remains constant throughout the extent of the loan period, while a floating interest rate is when the rate of interest varies according to the rates in the market during the tenure of the loan.

Is a guarantor required while applying for a home loan?

Yes. The bank requires a guarantor to ensure that the loan is paid back on time. The guarantor will be responsible for the repayment of the loan in case the borrower is unable to do so.

What are the documents I will have to submit to the bank?

Different Banks require different sets of documents for processing a housing loan.

Following are some documents generally required by most Banks:-

1. Proof of Income : Salary Certificate and Form No.16 for last three years or TDS Certificate for last 3 years, Bank Statement Showing Credit Entries for Salary / Professional Fees received for the past 12 months.
2. Professional Qualification Certificates etc.,
3. Title of the Property - Copy of the property sale deed, Title Report by a Solicitor, Valuation Report, NOC from the Builder / Society, Amenities Agreement, if any.
4. Other Documents : Proof of Age - Copy of Passport, Driving License etc., Proof of Residence - Copy of Ration Card, Photographs with Signature.

Are there any extra expenses that will have to be incurred while availing the loan?

Yes. These expenses include processing and administrative fees, stamp duty, pre-payment charges & delayed payment charges, legal fees, technical fees and registration fees.

What tax benefits are available on a home loan?

Under Section 88 of the Indian Income Tax Act, 1961, a rebate of 20% is allowed on the principal repayment of the loan up to Rs10,000. For self occupied houses, the income tax exemption limit for interest paid on housing loans is Rs 75,000. The Tax Certificate will be issued at the end of the financial year.

Does the property have to be insured ?

The property should be insured against fire and other hazards and the HFC will have to be the beneficiary of the policy.

What happens if there is a change in status from Non-Resident Indian to Resident Indian?
 
In such a case, the bank will reassess the repayment capacity of the applicant based on resident status and will prepare a revised repayment schedule with a new rate of interest as per the currently applicable rate on Resident Indian loans (for that specific loan product). The revised rate of interest will be applicable only on the outstanding balance.

If you have other questions that are not answered here, please feel free to write to us at info@makprojects.com , and we'll be happy to get you all the right answers.