Reliance

Home Loan


So, you have finally decided to buy your own house? Obviously you have to apply for Home Loans as with the rising inflation, it has become difficult to buy a house from one’s own pocket. Also, there are many other decisions that you need to make like selecting the property, searching for a home loan scheme, deciding the furniture etc. Remember, there are various pitfalls that can convert this smooth process into a bumpy one. Following are some pitfalls that you need to be aware of and avoid.

Look deep in your wallet before zeroing in on the property
Once you have selected the house that is perfect, you need to consider that whether it is affordable to buy that house or not. Buying a house beyond you budget is like having more food that you can digest and thus you end up with indigestion.

Evaluate MARKET Conditions
Survey the real estate MARKET and analyze if the prices of the property are stable and not likely to fall further. Check the Home Loan Interest Rates, see if they are expected to rise or lower in the future. Depending on the present MARKET situation, you may not want to miss out on a good opportunity because you jumped in too early.

Debt liabilities
Having a number of other loans and high credit card outstanding not only brings down the Eligibilityfor a large loan amount, it also adds the burden of repaying all these debts. In case, your Equated Monthly Installment for Housing Loan is 10-15 percent of your total income inclusive of other loans, it would be a smart DEAL . It is also a good deal if the total liabilities range from 10-20 percent, but usually it is not the case, and you should try to pay your debts sooner.

Increase the down payment
Try to pay high Down Payment as it will reduce the loan amount which further helps you in paying less in return to buy a house.

Always prepay
When you have applied for a loan, try to pay it before the completion of the loan. Prepaying your loan will lower the term and therefore you can save on interest. However confirm with your bank as the bank does not allow you to pay the whole loan amount during first 6 months.
Also, bank charges some fees to prepay your loan so make sure that Penalty Charges are not more than the interest you need to pay over the years. But it is the best way to close the loan early and save on your loan.

The family bank
It is not necessary to choose the bank from which your brother took his Loan. It is advised to do a research on the deals OFFERED by various banks and make a wise decision. This will make you get the better deal from any other bank.

The processing fee
If you nothing in writing from your lender, it is possible that you might lose the Processing Chargesthat you pay to your lender in case the loan gets rejected. So, you should get in writing form the bank or factor in all this MONEY for these kinds of losses.

The fine print
Read all the documents thoroughly before you sign. Usually people close the eyes and sign on the dotted line. Check if everything is clear to you and do not hesitate to ask questions.
Instead of ending up in a FINANCIAL hellhole, it is better to take some time out to read through the loan agreement carefully.

Home Loan

Home loan is provided in case you want to buy a house or a land but lack the required amount to purchase it. Home loans are provided by most of the banks present in India. Due to the increased competition in the market, banks have started to offer better terms and conditions on home loans. Normally people pay a certain amount as down payment and the rest of the amount for the house is financed by a bank. However, home loans are provided only when you meet a certain criteria fixed by a bank. The criteria depend on a particular bank as well as on your income, marital condition, number of dependents, etc.

Eligibility

Various banks fix their own criteria for providing a home loan. The amount of the home loans is decided by various factors like your income, spouse's income, number of dependents, age, qualifications, work experience and assets, liabilities, etc.
Your eligibility for acquiring a home loan can be augmented by combining income of your relative like father, spouse, mother or son. You can take home loan around 3 to 4 times of your annual income. Your EMI should not exceed more than 40% of your gross monthly income. The age of a home loan applicant should be between 21 years to 65 years.

Documents required
To obtain a home loan you need to fulfill some eligibility criteria. Due to increased competition getting a home loan has become easier now. Banks provide loans based on the income proof as well as on other criteria. Other criteria include age, work experience, number of dependents, spouse's income, and your assets and liabilities.
To obtain a home loan you need to provide the following documents to the bank:
Proof of income
Proof of age
Proof of identity and residence. You can provide either passport, PAN card, ration card or voter ID card
Salary slip of last 3 months along with salary certificate.
Proof of continuity in the job for last two years or Form 16.
Sale agreement and title documents in favor of the seller n case of an old house
Sale agreement or construction agreement with builder in case of new flat
Total cost break-up on builder's letterhead in case of a new flat or apartment

While signing the documents for a home loan make sure you read the documents properly. Also make sure you understand all the details of the agreement along with terms and conditions. Also make sure you have all the important terms written on paper to avoid any confusion later on.

FAQs

Can I get a home loan for an old house?
Yes. You can apply for a home loan for a new or even old house.

Can I get a home loan for purchasing a property overseas?
No.Indian banks do not offer home loans for buying houses overseas.

Can I get a loan for purchasing a land?
Yes. You can get loan for purchasing land, but it should be only for residential purposes.

Can I get home loan in India if I am a Non Resident Indian (NRI)?
Yes. Some banks have started to offer home loan facility to NRIs.

How do I know about my eligibility for a home loan?
Various banks fix their own criteria for providing a home loan. The amount of the home loans is decided by various factors like your income, spouse's income, number of dependents, age, qualifications, work experience and assets, liabilities, etc. Normally banks give up to 3-4 times the annual gross income as a home loan.

Does the co-applicant’s source of income influence my eligibility?
Yes. You can purchase a house along with a co-applicant. However, that co-applicant can be only your immediate family member. The relationships suitable for this thing include father-son and husband-wife combinations.

What is the meaning of a “pre-approved property”?
When a real estate builder has got his housing project pre-approved by specific home loan provider then it is called pre approved property. Normally when home loan provider pre-approves a project it looks at legal documents of the project, the stage of construction as well as the track record of the builder in completing a project.

What is a fixed rate home loan?
When a bank charges interest rates at a fixed rate then it is it is called a fixed rate home loan. In this type of loan the interest on the loan about remain fixed and constant. You should opt of this only when you are sure that the interest rates have been at the bottom and can only go up.

What is a floating rate home loan?
When the interest rate charged on a home loan keeps changing with respect to the prevailing rates in the market over the tenure of the loan, then it is called a floating rate home loan. This type of interest rates change periodically, and accordingly the tenure increases or decreases and also the EMI amount increases or decreases.

Can I convert a fixed rate loan to a floating rate loan and vice versa?
Yes. A floating rate home loan can be changed into a fixed rate one with no charges. However, banks charge a small fee for converting a fixed rate product to a floating rate product. Interestingly you can swap the rates any number of times at any point of time.

What charges I have to pay besides the interest rates charged by banks?
Banks charge administrative or processing fees apart from interest for providing a home loan. These include legal fees, technical fees, stamp duty and prepayment charges.

What happens to processing fees if the disbursement is not availed of?
Many private banks do not refund the processing fees f you cancel the loan after taking the offer letter from them. However, some Govt undertaking banks do refund the fee partially or fully.

What are the tax benefits in repayment of a home loan?
Both interest and principal components of the repayment can be claimed at time of filing for income tax during the year. Interest amount can be claimed as a deduction under Section 24. You can also claim up to Rs. 150,000 or the actual interest repaid whichever is lower. Tax benefits for principal up to the maximum of Rs. 100,000 can also be claimed under Section 80C.

If the value of the property fluctuates does it affect the EMI amount or tenure of the loan?
Any change in the value of the property does not affect the EMI or home loan liability.

Is it mandatory to get property insurance while going for a home loan?
It is not mandatory to buy property insurance while going for a home loan. However, it may be recommended due to it worth.

Can I sell my house even if the home loan is outstanding?
With the consent of the bank you can sell house even if the loan amount is outstanding. The consent letter by the bank usually mentions the amount at which the home loan can be considered fully paid off. The amount mentioned by the bank is inclusive of prepayment charges as applicable. The amount if also calculated at a future date to give you enough time to find a buyer.

Can I ask for a bigger or smaller amount of loan even after it has been sanctioned?
Yes. You can request for a bigger or a smaller amount of loan amount even if the loan amount has been sanctioned. However, it can be done only before the disbursement. Banks may agree to give you a bigger amount of loan only if they feel satisfied about your eligibility. The bank may ask for excess fees for requesting an increase in the loan amount, although they are not obliged to return excess fees paid in case you are requesting for a reduction in the loan amount.

Get Enquiry Here

CONTACT
9594111161 / 9967111161
ONLINE CONTACT
perfectsolution.helpdesk@gmail.com
ADDRESS
504, 5th Floor Suchita Business Park,
Raigad Chowk, Station Road, Ghatkopar (E), Mumbai 400 077
JOIN US

Best Viewed in 1366 X 768 Resolution