Home Loan : Overview

Home Loan / Housing loans which is sanctioned to buy or purchase or to own a house or residence is a known as a Home Loan / Housing loan. Any qualifying individual can avail housing loan subject to the purpose of owing a residence only. Home loans are not sanctioned to purchase any commercial premises like shop, office, warehouse or factory etc. Home Loan / Housing Loan is a type of secured loan as the house or residence purchased is mortgaged to the lending institution till the full & final Payment of the loan amount. This is a long term loan and the home loan repayment period could be anywhere between 5 years to 30 years. The rate of interest generally varies within the range of 8 % to 13% depending upon institution to institution. Floating interest and Fixed interest are the available interest calculation options to the borrower of Home Loan / Housing Loan in India. The government policies also impact the rate of interest on Home Loan. Generally it is a practice of lending institutions to grant up to 90% of the cost of the premises where the rest 10% of the cost of the premises are involved by the borrower. In certain cases the lending institute may sanction 100% home loan though it is at sole discretion of said institute.

A borrower may buy its prime residence by availing home loan or he or she may buy excess residential property. Borrower repays this loan in form of EMI – Equated Monthly Installments. A Borrower can also avail the facility of premature settlement of the loan or transfer of housing loan to other residential premises.

Home loans are also avaible for NRI.

Home Loan : Documents

There are some Documents for Home Loan / Housing Loan Mandatory like Pan Card. Age proof, Residence proof, Income Papers, bank statement.

1. Pan Card is Mandatory.
2. For proof of Identity : Pan Card/ Passport/ Voting I Card/ Driving license.
3. Age Proof : Pan Card/ Passport/ Driving License.
4. Residence Proof : Electricity bill/ Passport/ Telephone bill/ Mahanagar Gas.
5. Income documents
• Self employed : 3 yrs Income Tax Returns.
• Salaried : Form 16 for last 3 yrs & Salary certificate for previous three months.
6. Copy of bank statement for previous six months, reflecting salary or the regular business transactions.
7. Minimum two years for salaried as well as self employed.
8. All payment receipts.
9. Sale agreement (Agreement between Seller and Buyer)
   If Property is Resale then following documents are required :

• Registration and stamp duty receipt.
• Original share certificate of the Society.
• Allotment letter from the society in your name.

Lease deed, if executed.

• Certificate of the registration of the society.
• No-objection certificate (NOC) from the society.

1. 7/12 extract or property register card in the society's name.
   N.A (permission for the land from the collector)
   Order under the ULC Act (Urban Land ceiling Act)
   Building plans sanctioned by the authority.
   Corporation/Nagar Palika granted Commencement certificate.
   The latest receipts of taxes paid.
   Original Agreement to assign/Deed of assignment.
   Occupation Certificate (OC).
   
2. Possion Letter on builder s letter head in case of property purchased from builder.
3. 4 Photos.
4. Cheque will be in the name of seller in case of resale and builder if purchased from builder.

POST SANCTION DOCUMENTS for Home Loan / Housing Loan

1. Post Dated Cheques (PDCs) or ECS Mandate form or Standing Instruction Request.
2. Margin money receipt.

Home Loan : Eligibility

Everyone wishes to buy a property get a home loan and repay the loan can get Home Loan. Bank / lender has a set certain Eligibility criteria that you need to meet before getting Home loan / Housing Loan. Your age should be minimum 21 yrs and Maximum 58 yrs for salaried applicant and 60 years for self employed. Applicant should have stable soure of Income (The minimum take home pay of the applicant should be Rs. 1,00,000/- in case of salaried applicant & in case of self employed the net income after tax should be Rs. 1,00,000/-). The applicant should be in cumulative service for a minimum period of two years or should be self employed for a minimum period of three years. (Work Experience).

Home Loan : Tax Benefit

Interest of Rs. 1,50,000/- or an actual amount of interest paid for Housing Loan whichever is less is deducted from Income Tax under section 24 and the repayment of principal of Rs.1,00,000/- is also eligible for deduction from Income Tax under section 80C. If Customer has availed home loan.

Home Loan : Process

In India there are many Banks Lender who provide Home Loan / Housing Loan.
Process of this bank / lender is same.

• Application form is login.
• Personal Discussion is done by bank officer with customer.
• Bank's Field Investigation (All documents are Verify by bank which given with application form).
• Bank cheques CIBIL report.
• Sanction Letter.
• Signing of agreements and submitting post-dated cheques.
• Disbursement.

Home Loan : Hidden Charges

There are hidden charges Or Other Charges for home loan or say other charger for home loan these charges are :

• Processing Fees : For Handling and processing loan Documents.
• Legal fees : Customer has to pay to there Institution or Legal consultants of Institution.
• Valuation charges : Customer has to pay to there Institution or his Valuator.
• Stamp duty on creation of mortgage of property.
• Prepayment Charges : If money is paid by customer from his account then there are no prepayment charges. If Home loan is taken over by some other bank, lender, institute then customer has to pay prepayment Charges.