Eligibility
Broadly speaking, home loans can be availed whether you want to buy or build a house and can be used to repair or extend an existing house. Salaried Employees and Self-Employed Indian residents over 21 years of age at the beginning of the loan and below 65 at its maturity can avail Home Loans. (NRI) Non Resident Indians Salaried and (NRI) Non Resident Indians Self- Employed persons, under RBI guidelines, can approach nationalized banks and other Home Finance Companies for home loans. |
Loan Sanction
The loan sanction amount depends on your repayment capacity - based on your total current income and your future repayment capacity. Your spouse's gross income can be added to enhance the loan amount eligibility. The maximum loan that can be sanctioned varies with each bank/institution and generally ranges from Rs.2 lakhs to Rs.2 crore upto a maximum of 85% of the value of the property. |
Repayment
Usually loan tenures range from 2 years to 25 years and does not extend beyond the age of retirement or when you turn 65 years of age - whichever comes first. The EMI - Equated Monthly Installment is the amount of money you repay every month until the end of the loan tenure - which comprises both principal component and an interest component.
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Interest Rates and Charges :
A bank normally charges between 0.5% to 1% of the quantum of loan as one time service charges for sanctioning a loan.Home loans are sanctioned under two categories of interest rates namely floating rates and fixed rates. The applicant is allowed to make a choice at the time of application to choose between one of the above categories.
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Floating Rate :
Floating rate of interest, as the term states, depends on the prevailing market conditions and varies over time to time.
The current rates prevailing in India range from 8% per annum to 9.25% per annum. On a loan of Rs 30 Lakhs and below attracts interest at the lower end of the spectrum. |
Fixed Rate :
Again, as the term states, the rate of interest remains fixed over a certain period depending on the bank/institution. The current rates prevalent in India range from 11% per annum to 13% per annum. |
Documents to be Submitted :
From the Builder : The builder provides the financial institution/bank a complete set of documents pertaining to the land to establish clear marketable title. Apart from this the builder is expected to provide a copy of the agreements that are to be entered into with the purchaser of the property along with a copy of the plan approved by the appropriate authorities. |
From the Purchaser:
NRIs (Non Resident Indians) are expected to provide the following documents:
Copy of the passport clearly showing the VISA status.
Copy of pay slip. Contract certificate.
A power of attorney in favour of an Indian Resident who would be authorized to operate and deal with the financial institution / bank including signing of cheques etc.. |
Indian Residents :
Salaried Employees :
Copy of salary certificates.
3 years Income Tax return acknowledgement. Identity proof.
Self Employed / Business Person :
Audited copy of statement of income for three years.
3 years Income Tax return acknowledgment.
Copies of audited balance sheet & profit and loss account.
Copy of partnership deed if applicable.
Address proof. |
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