Home Loans in Bangalore List of documents required to process the loan
The reasons for buying a house/apartment or land can be many but top on the list there key issues like affordability, quality, comfort and accessibility. Buying a house is a huge financial commitment. The concept of home loan start with the financial assistance to purchase/construct a residential property against the security of the property to be funded. Planning various aspects of purchasing a house well in advance can make the process of owning a house a beautiful experience as a large amount of their income goes towards home loan. Banks or Home finance companies (HFC) compute loan eligibility to ensure that the borrower can comfortably repay the loan amount, and reduce the probability of default.
Housing Loan is available for
- Purchase of House/Villa/Flat (Ready/ under construction),
- Transfer of your existing home loan from one Bank/ Home finance company to another,
- Composite Loan: Purchase of Plot plus construction,
- Renovation, re-built or extension of your existing residential property
- Plot loan: Some Banks/ Home finance companies also provide loan for purchase of residential land
- Loan against property: Many of the Banks/ housing finance companies also provide loan against residential properties (Mortgage loans)
- Convenience of service at your doorstep.
- Hassle free and speedy loan approvals.
- Strategic partnerships with top financial institutions in Bangalore
- Personalized counseling and unmatched products and customer service
- Legal and technical assistance at loan processing
- Experienced team guides customers throughout the loan process
- Suggests alternative banks based on customer requirements
- The customer loan amount is determined on the customer loan eligibility and the loan to value of the property, whichever is lower.
- You can avail a home loan ranging from Rs. 5,00,000/- to Rs. 5,00,00,000/-
- The home loan repayment period or tenure ranges from generally 1 to 25 years, subject to applicant age should not exceed 60 years for salaried people and 65 years for self-employed people at the end of the tenure.
- Home loan can be applied individually or jointly with spouse children and parents. Home loan eligibility can be increased by including co-applicants income. Some banks can include brother’s income also if the property is registered in both names.
- EMI: EMI stands for Equated Monthly Installment. EMI is the installment to be paid for the total loan amount for specific period at certain Rate of interest, which will be the combination of principle & interested.
- Pre EMI: When you are going for loan for under construction property the loan disbursement will happen based on the stage of construction. In this case you will be paying Pre EMI, which is interest for the only loan amount disbursed. The EMI will be started after full disbursement of the loan.
- Fixed Rate of Interest: In fixed rate option, the rate of interest will be same for the period opted for. Some bank will provide fixed rate of interest for only for 3-5 years and after that the customer can decide on to continue with new fixed rate on that or can decide to go with floating rate.
- Floating Rate of Interest: In floating rate option, the rate will change periodically, based on the Prime Lending Rate (PLR) or Base Rate of Banks or Housing finance companies.
- Base Rate: according to RBI guidelines, base rate is the minimum rate of interest the bank is allowed to charge on its customers. Base rate is calculated based on the factors like the cost of deposits, banks profitability in precious year and other factors like administrative cost and etc. RBI had directed all the banks to switch over to the base rate system from the existing Benchmark Prime Lending Rates (BPLR) system with effective from 1 July, 2010.
- Benchmark Prime Lending Rate (BPLR): The BPLR is the interest rate that commercial banks charge their most credit-worthy customers. According to the Reserve Bank of India banks are free to fix the Benchmark Prime Lending Rate (BPLR) with the approval of their respective Boards. Banks are free to decide the BPLR but their interest rates have to have a reference to the BPLR fixed. But RBI had directed all the banks to switch over to the base rate system from the existing Benchmark Prime Lending Rates (BPLR) system with effective from 1 July, 2010.
- Loan to Value (LTV): LTV ratio is the ratio of the loan amount over the property value or acquisition price. LTV is the loan amount that bank will fund on certain value of the property. Generally the LTV will be 75-85% of the property cost.
- Margin money: Margin money is also called as own contribution. Generally it will be 15-30 % of property cost. The remaining amount will be funded by the Banks or Housing finance companies.
- How Loan eligibility is calculated: Banks/HFCs assess repayment capacity of the customers based on income, age, qualifications, experience, number of dependents, assets, liabilities, savings history, so that the customer can comfortably repay the loan amount. Normally the banks will take 50-65% of customers net take home as EMI payable capacity.
- Prepayment: Prepayment is the amount you pay other than EMI when the customer has funds available with them. Generally prepayment can be done 3-5 times in a financial year. The prepayment amount will be deducted from the principle.
- Pre-closure: Pre-closure is similar to prepayment but in this case you will be closing the total loan amount in on instance.
- Prepayment & Pre-closure charges can be 2-4% of the amount repaid. Some Banks/HFCs will not collect any charges if it is paid from own sources like selling the property or Bonus etc.
- Tax Benefit on Home loan: You can get tax benefit Under the Income Tax Act, 1961, if you have taken home loan as mentioned below:
- Sec 24(b) of the Income Tax Act, 1961: Up to Rs. 1,50,000 can be claimed on the interest paid of the home loan in a financial year.
- Sec 80(c) of the Income Tax Act, 1961: Up to Rs. 1,00,000 can be claimed on the principle repaid of the home loan in a financial year.
- CIBIL: Credit Information Bureau (India) Limited (CIBIL), is an organization which has a access to credit information of individuals and commercial establishments. CIBIL collects information from its members like banks, financial institutions, HFCs, credit card issuing companies and other lending institutions. CIBIL provides information on the credit history of the applicant to the Banks/ HFCs.
- Individuals can request Credit Reports directly from CIBIL. The following link helps you get CIBIL Report and CIBIL Score.http://www.cibil.com/accesscredit.htm.
Why Acme Financial services?
We at AFS understand how special a new home for you. Our services will help you finance your dream home from 5 Lacs to 10 Cr with multiple banks to get the best product for you with great features.
Points to be noted before applying Home Loan
The Bank/ HFC calculate the loan eligibility based on the factors like income, age, number of dependents, assets and liabilities, saving history, repayment history of other loans, total work experience, education qualification, and company he/she working for etc.
Loan to value (LTV) of the property is calculated on the market value of the property. The LTV for housing loan will be 75-80% of market value. The remaining amount has to be arraigned by the customer before the disbursement of the housing loan.
For Example: Mr. Balaji is getting a monthly income of RS. 100000/- after all deductions. Now he is paying RS. 4500/- for the car loan and Rs. 6500/- for personal loan. He wants to apply for a home loan for 20 years tenure @ 9 % Rate of Interest. His eligibility can be calculated as follows:1. 65% of net salary RS. 65000/- is his EMI payable capacity.
2. So deduct 11000/- which he is paying for loans from 65000/-.
3. EMI per Rs. 100000/- per month for 20 years @ 9% rate of interest is Rs.900/-
4. Net Loan eligibility (in Lakhs) = 54000/900 equals to 60.
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