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Written by Site Administrator
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Tuesday, 27 October 2009 16:06 |
A home loan is an amount that you borrow from a Bank or a Financial Institution to build or buy yourself a home. The amount is generally lent on a long term basis, that is you repay the principal and the interest in the form of Equated Monthly Installments over a period of 10, 15, 20 or 30 years. The bank will hold the Title Deed of your home as surety till the complete amount along with interest is repaid.
The amount you get as loan will depend on your credit profile. Your EMI and the tenure of the loan are decided in mutual concern based on your capacity to repay the loan and the no. of years of service you have left in your employment.
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Written by Site Administrator
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Tuesday, 27 October 2009 16:08 |
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Banks issue home loans for the following types of property: - New home or flat in a ready to occupy condition
- Semi completed home or flat nearing completion
- To build a house on your own land
- For purchasing land
- For renovating and repair works
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Written by Site Administrator
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Tuesday, 27 October 2009 16:12 |
The maximum limit for a home loan in India is Rs. 5,000,000. Generally, Bank gives 80 to 85% of what you are eligible for. Banks have two criteria in deciding the amount that you can get as home loan.
1. The value of the property as assessed by the bank personnel
2. The total amount of loan you can get based on your salary and the no. of years of service you have left.
Of these two figures, whichever is less, 80 to 85% of that amount is sanctioned as loan.
Example:
Let us assume that - 1. the value of your prospective home was calculated by the Bank as 20 lakhs; 2. the bank calculates your eligible loan amount based on your salary etc is 25 lakhs. Of these two amounts, 20 lakhs is the lesser one. So you will get 80% 20 lakhs, approx 16 lakhs.
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Written by Site Administrator
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Tuesday, 27 October 2009 16:24 |
The amount that you have to bear from your pocket over and above the amount sanctioned by a bank as loan is called your downpayment amount. This is usually upto 10 to 20 % of the total value of your property.
This amount will run into a couple of lakhs or more even for a property worth 5 to 10 lakhs. So you need to be ready with this amount before even approaching the bank for a home loan.
You can raise this money by liquidating your existing assets like mutual funds, fixed deposits, gold, etc.
You don’t automatically become eligible for a home loan as soon as you have your first job. You must build your credibility by keeping a good credit statement, by paying taxes for a couple of years, and by showing stability in your career. You must also be employed with an employer of good repute at the time of applying for a home loan. This whole process will easily take three years from your first day in your first Office. If you have plans to buy your own house you must plan your savings right from day one of your first job. Keep some money as saving every month in the form of FDs, MFs, Bonds, etc. All this will be useful as downpayment.
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Written by Site Administrator
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Tuesday, 27 October 2009 16:26 |
A bank or a financial institution will first screen the submitted documentation to make sure that the property is eligible for a loan. They will check to see that the property has a clear title, clear history, necessary approvals from the municipal authority, that the land is not an assigned land, that there are no legal complications and so on.
Once this is done, a property evaluator from the Bank will visit the site and evaluate the value of the property, its existing market value, its age, its quality of construction, etc and then fixes a median price between the government and the market values of the property. A depreciation amount is deducted from this amount if the property is old or second hand.
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Home Loan
