Home Loan

HOME LOAN

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Are you looking to buy a new house?

No matter how well enough you have saved to pay for the price of the property, there are chances that you may fall short of money. In this situation, banks and non-banking financial companies offer loans in the form of a housing loan.

Home sweet home! Let us fulfill your dream!

 

Why Buying a Home Is Better than Renting?

Home Sweet Home! That’s what we all want, right? Home Loan is a Secured Loan offered against the security of a house/property which is funded by the bank’s loan, the property could be a personal property or a commercial one. There are also certain tax benefits available on your home loan under the Section 80C/80EE of Income Tax Act.

Primarily, there are two types of home loans based on the interest rate- floating and fixed. In case of fixed rate loan, the interest rate doesn’t change with market fluctuations and is usually capped at 1-2.5% higher than floating rate home loan. Whereas, floating interest loan varies as per the market conditions.

The borrower can avail home loan from banks or financial institutions either for purchase of a new house from builder or a house meant for resale or for construction of house or for extension of an existing house.

Types of Home Loan:

  • Purchase of Residential Property.
  • Construction of a House.
  • Purchase of Land.
  • House Expansion.
  • Home Improvement Loans.
  • Home Conversion Loans
  • Balance Transfer Home Loans.

Interest Type

Some of the financial institutes offer pure Fixed interest rate that remains fixed for the entire tenure of loan or for certain period. Nowadays, some lenders offer Dual Rate where the interest rate remains fixed for certain tenure like1  10 years and then gets converted to floating rate of interest.

In Floating rate, the interest rate fluctuates with market conditions. The rate of interest is tied up with the Base Rate (BR) of the bank or Prime Lending Rate (PLR) of the Housing Finance Companies and gets affected whenever there are changes in the Repo Rates announced by RBI or any changes in Base Rate / PLR of the lender.

Final Loan Amount Calculation

As per norms, all the banks and NBFCs finance 80% to 90%of the agreement value of the property. As per RBI circular, banks do not fund Stamp Duty and Registration Charges anymore.

The final loan amount is dependent on the factors like income and regular outgoings, existing loans, repayment track record, valuation of the property by the bank or lender etc.

To increase the eligibility amount, you can add the earning of your parents / spouse / children and in some cases, earning of brothers, as co-borrowers to the loan or your rental incomes etc.

Documents Check-list

To initiate the loan process, the lender will require the Loan Application Form signed by the applicant and co-applicants along with a photograph

KYC Documents

  • Proof of Identity  Pan Card / Valid Passport / Voter ID card / Valid Drivers License.
  • Proof of Address  Aadhaar card / Electricity /  Phone Bill of latest 3 months.

Proof of Income

  • Form 16 for the previous 2 years.
  • Salary slip for previous 3 months.
  •  Latest bank statement/Passbook from where you can show salary/income being credited for the previous 6 months.

Other Documents

  • Employee contract or appointment letter in case of current employment is less than 1 year.
  •  Passport size photograph of all the applicants / co-applicants to be affixed on the application form and signed across.
  •  The Cheque for processing fee.

Property Documents

Chain of Sale Agreements if it is a resale property with Draft Agreement if it is a builder purchase.Occupancy Certificate and Approved Plan or Commencement Certificate.

How Mantra Advisory will be more beneficial?

Our aim is to make your process of Home Loan swifter and hassle free. You will get special rates and waiver in processing charges and the entire transaction will be taken care by us. You just have to apply with us no need to go anywhere.

Now, Budget won’t hold back.

FAQ

Home Loan is a secured loan given by a bank against the security/hypothecation of an underlying property. In the event of failure to repay by the borrower, the bank can, subject to laws of India, attach/sell the underlying property and recover the principal amount and any outstanding interest thereon. A home loan can be availed for buying an under-construction property, resale property or even to construct a house on a vacant piece of land.

If the interest rate on the loan varies during the loan period due to fluctuations in market conditions then it is called floating rate home loan. For instance if the Reserve Bank increases loan rates, then people with flexible rate home loan will suffer an increase in the amount of EMI being paid for the particular loan.

Fixed rate home loan is at a predetermined interest rate during the loan period, irrespective of market conditions.

The tax benefit on home loans is given both on repayment of the principal amount and on interest paid:
Repayment of the principal amount - Under Income Tax Section 80C with a maximum tax deduction of Rs. 150,000.
Repayment of the interest rate on home loan- Under Income Tax Section 24, with a maximum deduction limit of Rs. 200,000.

If you are an individual - your spouse, your parents, or even your major children can be your co-applicants. The co-owner of a property has to be a co-applicant, but a co-applicant need not be the co-owner of the property.

Yes, Prepayment is allowed on Home Loan.

Prepayment / foreclosure is allowed on Home Loan without any charges.

There is no capping of upper limit of number of co-borrower, however minimum one co-borrower is required.

Note: Member who all are party to agreement must have to come up as o borrower / co-borrower.

No, borrower cannot sell property without clearing outstanding home loan amount of existing bank/financial institution.