Home Loan

Saving up for your dream home? Eyeing a property which will serve as your retirement getaway? Home Loans can help your convert your dream into a reality. Read the FAQs given below before going in for a Home Loan.

What is Home Loan?
Ans.: Home Loan is offered to individuals who desire to buy or build  a house. The property is mortgaged to a venture capitalist  as  security till the repayment of the loan. The bank or economic institution will hold the title or deed to the property till the loan has been paid subsidizedwith the interest due for it.
 
What are the types of Home loans available?
Ans.: The following different kinds of home loans are available:
Through a Home Loan, one can purchase or construct  a new house/ apartment.
A Home Improvement loan is offered to those who like to improve/modify their houses
A Home Extension mortgage is for consumers planning to add more space to their house such as a new room or a new division.
A Loan against Property is offered for  individuals seeking loan against an already existing property
A Land Purchase Loan is provided to consumers buying territory as an financial affair, as the case may be to build a house later on and a Balance transfer loan is basically a home loan to pay off an existing home loan as this enables you to avail a loan with a lower interest rate.

What are the eligibility conditions for a home loan?
Ans.: To qualify for a home loan, most of the lending institutions in India require you to be:
An Indian resident or NRI
Above 24 years of age at the commencement of the loan
Below 60 or retirement age when the loan matures
Either self employed or salaried 

What is the maximum amount that can be borrowed?
Ans.: The amount that can be financed typically depends on the situation of the borrower (resident/non-resident), quality of home loan (renovation, property purchase, property extension) and the financial institute. It is normally offered for qualified 80-85% of the cost of the property.
 
What is the usual repayment duration?
Ans.: The repayment term takes into consideration the repayment capability of the borrower based on their earnings and existing EMIs. The typical term for which a home loan can be taken is to what end between 5-30 years.
 
What is the types of interest rates?
Ans.: The interest rates for Home Loans can be fixed or floating, or partly fixed or partly floating, suiting the needs of the borrower.
 
What other costs will i incur while applying for a home loan?
Ans.: For a Home Loan, the fundamental registration charges, transfer charges and stamp duty costs are added to the charge of the home. Some additional charges include:
Processing fee or booking perk – paid to the lender when you apply for the loan. It could be fixed or a percentage of the loan amount
Pre-payment penalty – if the loan is repaid once the agreed period of time, some lenders may charge a panalty, upto 2% of the amount pre-paid.
Miscellaneous costs – there could be a documentation or legal fee, furthermore known as “application fee”For a Home Loan, the primary registration charges, transfer charges and stamp duty costs are added to the charge of the home. Some distinctive charges include:
Processing require or booking benefit – paid to the lender when you apply for the loan. It could be fixed or a percentage of the capital outlay amount
Pre-payment fine – if the loan is repaid once the agreed period of time, several lenders may charge a penalty, upto 2% of the amount pre-paid.
Miscellaneous costs – there could be a documentation or legal fee, also known as “application fee” 

Are securities required for home loans?
Ans.: In most cases, the property to be purchased itself becomes the security and is mortgaged to the lending institution before the complete loan is repaid. Some institutions may ask for extra security such as life insurance policies, FD receipts and share or saving certificates.

What is the time required for loan disbursement?
Ans.: On an average, loans are disbursed within 3-15 days after reasonable and complete documentation and completion of all relevant procedures, including point of comparison that 15% of the charge has been paid upfront to the seller of the property.
 
Loan Evaluation Process
 
How do i know if i am eligible for the loan?
Ans.: Taking a loan can be a complex process for most people. The process flow below indicates what to expect at every step during the loan assessment process. It helps understand how the credit decisioning works in bank  and the steps they take before deciding to accept or overlook a loan/ credit card.
Applicant fills the loan allocation form
Hands it over to the Bank
Bank checks with CIBIL for credit score and report
High credit score leads to elegibility check basis documentation
 
What do the banks broadly check for ?
 Ans.:Suit filed or examination paper off cases  released in the Credit Information Report [CIR]. This is indicated in the 'Account Status' requirement of your CIR  Payment history trend - if there has been any drop or rival overdue. This is indicated in the 'Days Past Due' [DPD] function of your CIR Company profile where you work - the banks generally have an approved list to whom they extend mortgage / credit card. EMI to Income ratio : if your existing total EMI exceeds your monthly earning by more than 50% then chances of getting loan are reduced.