Escolar Documentos
Profissional Documentos
Cultura Documentos
INDEX
An Introduction to Home loans Loan Eligibility & Cost Credit History Types of Home Loan Services Available In Market Loans FAQs How to buy a house Different Players in Home Loan Market THE Benefits of taking a Home Loan. Market share of the Players in Home Loan Market Vital Tips for Home Loans How much loan to take?
Bibliography
Down payment. ways in which one can source his / her down payment
Generally as a thumb rule, banks or financial institutions lend 85% of the cost of the property. 15% of the money is expected to be paid as a down payment for the loa
Reverse mortgage
This loan facility allows a senior citizen (above 60 years of age) eligible to apply for a reverse mortgage loan and avail 60% of the value of the residential property he resides in and retain the right to continue to reside there. The maximum tenure for this loan scheme is 15 years.
a) Processing Charge: It is a fee paid to the lender when you apply for a loan. It could either be a fixed amount not linked to the loan or could also be a percentage of the loan amount.
b) Pre-payment Penalty: When a loan is paid back before the end of the agreed duration, a penalty is charged by some banks/financial institutions, which could be up to 5% of the amount pre-paid.
You can take a home loan before or after identifying the property you want to purchase or when the property is under construction or for purchasing a plot of land for investment or to renovate an existing home.
Eligibility to be a co-applicant
The co-owner of the property you are going to purchase should also be a co- borrower/co-applicant. The reverse however is not stressed by lending institutions. Financial institutions accept a parent or spouse as an ideal choice for a coapplicant. A fiance can also become a co-applicant but the loan disbursal will begin only after the submission of the marriage certificate.
Amortization schedule
An amortization schedule is a table giving the reduction of your loan amount by monthly installments. The amortization schedule gives the breakup of every EMI towards repayment interest and outstanding principal of your loan.
Factors one need to keep in mind while comparing loan from different financial institutions
A loan applicant needs to keep a few things in mind when comparing loans. The applicant needs to determine the kind of loan and the amount he wants to apply for. He needs to keep in mind the total cost of the loan, which will be paid up by the end of his loan tenure. The second step is to understand the terms and conditions under which financial institutions are offering the loan. Finally he needs to evaluate, which loan offer is the best bet for him.
10
Credit History
Credit history.
A credit history is basically a record of your past repayments of loans and credit card bills. Also, there is a central bank of data available with the Credit Bureau of India Limited (CIBIL), where data from all the banks on existing loans and their repayment patterns of their customers are accumulated. Before approving your loan a financial institution always checks with CIBIL on your loan repayment track record.
Repayment track record of previous loans considered in calculating my eligibility for a new loan
It definitely has its benefits! A good repayment track record could fetch you a higher loan amount at a lower interest rate as it is standing proof for your money management capabilities. In case of a bad repayment record you will be charged high interest rates and you will find it difficult to obtain a loan.
11
Documentation
How can one apply for a loan.
When you are ready to apply for a home loan, you should evaluate your options by presenting your requirements with different banks. What was earlier a daunting task involving rushing from bank to bank for a series of discussions and bargaining for the best deal, is now just a simple 15 minute process thanks to BankBazaar.com. Search BankBazaar.com to find the best loan bargain that is most suited to your needs. Then get your documents ready for the Bank to collect it at your doorstep and begin processing your loan.
2. A document checklist, so that one can be ready when the Bank comes to collect it from my residence.
Make sure you check with your Bank or NBFC to figure out which of the following documents you need to submit, as the requirements differ from bank to bank.
12
A. Identity proof:
Driving license Voters ID Passport PAN card Ration card Employee ID Bank passbook Letter from a recognized public authority or public servant verifying your Photograph Confirmation letter from your employer or another bank verifying your photograph
13
B. Address Proof:
Driving license Voters ID Passport Ration card Bank passbook or Bank account statement LIC policy/ receipt Utility Bill - telephone, electricity, water, gas (less than 2 months old) Letter from any recognized public authority verifying residence address of the customer Letter from your employer
14
C. Age Proof:
- Driving license
- Passport
- Bank passbook
- PAN Card
- Birth certificate
15
D. Income Proof:
The following set of documents that detail your credit profile varies according to whether you are a salaried individual or a self-employed individual.
i. Self Employed/Entrepreneurs:
- A brief introduction of Business/Profession - Balance Sheet, profit and loss account statement of income, proof of income tax returns - For the last 3 years certified by a CA - Photographs - Receipts of advance tax payments if any made - A photocopy of Registration Certificate of establishment under Shops and Establishments Act/Factories Act - Registration Certificate for deduction of Profession Tax - Certificate of Practice - Receipts of Bank loans - Proof of investments (FD Certificates, Shares, any other fixed asset)
16
3. Documents supporting the financial background of the borrower (his liability and assets if Any)
4. Photographs.
17
Property Documents
A) If a flat is purchased from the builder, one needs the following supporting documents to submit to the bank.
2. 7/12 extract - This is issued by the concerned land authorities giving details such as the survey numbers, area, date from which current owner is registered as owner etc.
3. Property register card, which is obtained from the City Survey Department
4. N.A. permission for the land from the collector, if its agricultural - If the land is agricultural and is being utilized for residential/ commercial/industrial use, then such agricultural land has to be converted to non-agricultural land and a Non-Agriculture Order has to be obtained from the Collector of the district where the property is located.
5. Search Report and Title Certificate - A search report and title certificate can be obtained from an advocate who will conduct a survey of the title of the property by visiting the office of registrar. A legal opinion can avoid any legal hassles later and is mandatory to be filed with the agreement for sale.
18
11. Latest receipts for taxes paid towards the land or property or flat to be purchased
19
B) In case one is buying from a Cooperative Society, Then ensure he /she has the following documents in Place.
1. Original share certificate of the Society 2. Allotment letter from the Society in your name 3. Copy of the lease deed, if executed 4. Certificate of the registration of the society 5. Copy of the byelaws of the Society 6. No objection certificate from the Society 7. 7/12 extract or property register card in the Societys name 8. Copy of N.A permission for the land from the collector 9. Search Report and Title Certificate 10. Copy of order under the Urban Land Ceiling Act 11. Copy of the building plans sanctioned by a competent authority 12. Commencement certificate granted by Corporation 13. The latest receipts of taxes paid for the property 14. Original Agreement to assign / Deed of assignment
20
C) If one is constructing on your own land then one will need the following documents.
1. Original sale deed of land and extract of Index II 2. 7/12 extract or property register card in your name 3. Copy of N.A. permission for land from the collector 4. Search and title report 5. Copy of tax paid under Urban Land Ceiling Act (obtained from Commissioner ate of Urban Land Ceiling and Urban Land Tax) 6. Copy of the building plans sanctioned by a competent authority 7. Building permission granted by the Corporation 8. The latest receipts of taxes paid for your land 9. Estimate of the cost of construction certified by the architect
21
22
No Objection Certificate(NOC).
This certificate states that it allows the property to be mortgaged by the bank. This comes into effect in instances like a co-operative society that owns the property but whose members have a right to reside in the premises and also transfer the rights to someone else. This is also true in the case of leased land on which property is built. In this instance, the property is owned by the borrower but the land on which the property is built legally belongs to a development authority. This certificate safeguards the interests of the Bank.
23
There are three steps to a home loan application 1. Application - You submit a completed application form with all the essential documents.
2. Sanction -
You get an approval for a specific loan amount based on the value of your property and repayment capabilities.
Most financial institutions will contact you within one business day of your application being submitted
24
25
26
27
28
Indian citizens who stay abroad for employment or for carrying on business or vocation outside India or for any other purpose in circumstances indicating an indefinite period of stay abroad;
Government servants who are posted abroad on duty with the Indian missions and similar other agencies set up abroad by the Government of India where the officials draw their salaries out of Government resources;
Government servants deputed abroad on assignments with foreign Governments or regional/international agencies like the World Bank, International Monetary Fund (IMF), World Health Organization (WHO), Economic and Social Commission for Asia and the Pacific (ESCAP);
Officials of the State Government and Public Sector Undertakings deputed abroad on temporary assignments or posted to their branches or offices abroad.
29
REFINANCE LOAN
This loan helps you pay off the debt you have incurred from private sources such as relatives and friends, for the purchase of your present home.
STAMP DUTY LOAN This loan is sanctioned to pay the stamp duty amount that needs to be paid on the purchase of a property.
30
Loans FAQs
What is an EMI?
EMI (Equated Monthly Installment) is the amount payable to the lending institution every month, till the loan is paid back in full. It consists of a portion of the interest as well as the principal.
31
32
33
Can the property be sold, even when the home loan is outstanding? :
Yes, the property can be sold after getting consent of the lending bank. This consent letter by the bank usually mentions the amount at which the home loan can be considered fully paid off. This amount is inclusive of prepayment charges as applicable and calculated at a future date to give you.
34
[Type the document title] If the value of the underlying property falls does it affect the EMI amount or the tenure of the loan? :
No. fluctuating value of the property does not affect the EMI or home loan liability.
Can a fixed rate loan be converted to a floating rate loan and vice versa? :
Yes, you can convert floating rate home loan into a fixed rate one with no extra charges. However, banks charge a small fee for converting a fixed rate product to a variable rate product. The swap can be done any number of times and at any point of time.
35
Step 1: Figure out how much you can afford. What you can afford depends on your income, credit rating, current monthly expenses, down payment and the interest rate. The calculators can help, but it is best to visit a lender to find out for sure. A housing counselor can help you figure out how to manage and pay off your debt, and start saving for that down payment!
Step 3: Shop for a loan. Save money by doing your homework. Talk to several lenders, compare costs and interest rates, and negotiate to get a better deal. Consider getting pre-approved for a loan.
Step 5: Shop for a home. Choose a real estate agent, Wish list - what features do you want, Home-shopping checklist - take this list with you when comparing homes.
36
Step 6: Make an offer. Discuss the process with your real estate agent. If the seller counters your offer, you may need to negotiate until you both agree to the terms of the sale.
Step 7: Get a home inspection. Make your offer contingent on a home inspection. An inspection will tell you about the condition of the home, and can help you avoid buying a home that needs major repairs.
Step 8: Shop for homeowners insurance Lenders require that you have homeowners insurance. Be sure to shop around.
Step 9: Sign papers. You're finally ready to go to "settlement" or "closing." Be sure to read everything before you sign!
37
ICICI Bank is the largest provider of Home Loans in India. ICICI Home Loans offer unbeatable benefits to ensure that its clients get the best deal without any hassles. ICICI Bank Home Loans provide loans not only at competitive interest rates, but also are so designed that they cater to the specific needs of consumers. New products / new features in existing products are introduced from time to time based on customer feedback. ICICI Bank offers easy home loans for purchase or construction of flat or house.
The benefits associated with ICICI Home Loans which give them an edge over other players in the market are:
Attractive and customer friendly loan interest rates Loans as low as INR 0.2 million is available Term loans up to 20 years is available Loans come with a Free Personal Accident Insurance Policy Premium charged in case of insurance options for Home Loans is also attractive. Simplified Documentation Doorstep Service Home Loans can be sanctioned even before selecting a property
38
The other types of loans include Land Loans, Office Premises Loans, Home Improvement Loan and Home Loan for NRI. One can also leverage his/her existing property to get a Loan against Property, Property Overdraft or Lease Rental Discounting. All of these are available at a fixed rate or an adjustable rate or interest.
39
Loan Features
Loan Amount Interest Rate Tenure Pre Payment Charges Service Charges 80% of the cost of the property N.A. Maximum 20 years 2% on the principal outstanding
0.5% - 1%
40
41
Loan Feature
Loan Amount Interest Rate Tenure Pre Payment Charges Service Charges 40 to 60 times of Net Monthly Income 12.25 % p.a. Maximum 25 years Not provided
42
Features
Attractive housing finance rates: We offer attractive interest rates that make your housing loans affordable and easier on your pocket every month. Flexible rates: Choose between fixed and floating rate options depending on which way you think interest rates are moving. Balance transfer facility: Not satisfied with your existing home loan provider? You can transfer your home loan to us without any hassles. Doorstep service: You don't have to go the bank for home loans; the bank will come to your doorstep. Perfect for those leading busy lives. Nil prepayment charges: Come into some money and want to pay off your housing loan early? You can do that at Axis Bank without worrying about prepayment charges. Quick and transparent processing
43
Repayment period for home loans shall not exceed 25 years. Repayment period of pre-allotment bookings of housing loans shall not exceed 1 year Repayment period of improvement or renovation or extension of existing property shall not exceed 10 years. Security Equitable mortgage of the property to be financed by way of deposit of title deeds. Disbursement The loan will be disbursed in full or in suitable installments, taking into account the requirement of funds and progress of construction, as assessed by the Bank directly to seller or builder or local development authority or supplier of materials etc. Processing charges or admission fee Processing fee equivalent to 1% of the loan amount (applied for) will be collected along with the application form (taxes as applicable). Penalty for early closure Nil.
Other Conditions Bank reserves the right to reject any application without assigning reasons thereof The applicant will undertake to inform the Bank as and when there is a change in address or employment The terms and conditions mentioned above and elsewhere under the scheme are subject to modification from time to time solely at Bank's discretion.
Loan Feature
Loan Amount Interest Rate Tenure Pre Payment Charges Service Charges Upto Rs. 50 lacs N.A. Tenure not mentioned Pre-payment charges not mentioned 0.5% of the loan amount
44
AXIS Bank Home Loan has recently seen slashing down in interest rates on its floating rate housing loans by 25 basis points with effect from November 25, 2007. UTI Bank is now working under the name of Axis Bank. UTI bank offers a home loan for:
Purchasing a plot and constructing a house on it Constructing a house on an already owned plot Purchasing a house/flat but that shouldn't be more than 15 years old For renovating/extending an old house/flat Take-over of existing housing loan Home Loan to NRI on the purchase of ready reside
45
46
Processing charges:
Baroda Home Loan (Resident Indians) - Loans upto Rs. 20/- lacs : 0.35% - Loans above Rs. 20/- lacs : 0.40% - Maximum : Rs. 15000/Baroda Home Loan to NRIs / PIOs - Loans upto Rs. 20/- lacs : 0.35% - Loans above Rs. 20/- lacs: 0.40% - Maximum : Rs. 15000/-
47
Income Criteria:
Monthly Income Up to Rs. 20,000/More than Rs.20,000/- & up to Rs. 1 lac More than Rs. 1 lac Modified Criteria 36 times of monthly income 48 times of monthly income 54 times of monthly income
Margin:
Monthly Purpose income Upto Rs.20000/- Purchase of plot House/flat already constructed from own resources All other cases Above Purchase of plot Rs.20,000/House/flat already constructed from own resources All other cases Margin 20% 25% 20% 20% 20% 20%
As security against the loan amount, the bank will take an equitable mortgage of the housing property and/or other suitable securities. No Fees will be charged on part prepayment / full prepayment of the loan amount from own sources. The loan can be repaid in a maximum period of 25 years taken under floating rate option subject to the period up to age of retirement in case of salaried persons and 65 years in case of others. In case of full prepayment or foreclosure (other than from own sources) fees will be charged at 0.5% for each year of the residual period subject to maximum of 2%.
48
HDFC Bank
HDFC Bank brings, HDFC home loans to your doorstep. Over 3 decades of exclusive experience, a dedicated team of experts and a complete package to meet all your housing finance needs, HDFC Home Loans, help you realize your dream.
HDFC Home Loan Advantages Counselling and advisory services for acquiring a property Instant Home Loan Approval Widest range of home loan products & services like Home Loans, Home Improvement Loans, Home Extension Loans, Loans to professionals for office or clinic, Home Equity Loans (Loan against Property), Short Term Bridging Loan etc. Loan from any office for purchase of home anywhere in India Loan approval even before a property is selected Flexible loan repayment options like Step Up Repayment Facility, Flexible Loan installments Plan, Tranche Based EMI, Accelerated Repayment Scheme Vast network of over 289 offices in India, offices in Singapore, London & Dubai and franchises in the Gulf Cooperation Council (GCC) region. Click here to find the nearest HDFC Office. Most experienced and empowered personnel to ensure smooth & easy processing Free & safe document storage
49
Customers purchasing an under construction property need to pay interest (on the loan amount drawn based on level of construction) till the property is ready. To help customer save this interest, we have introduced a special facility of tranche Based EMI. Customers can fix the installments they wish to pay till the property is ready. The minimum amount payable is the interest on the loan amount drawn. Anything over and above the interest paid by the customer goes towards Principal repayment. The customer benefits by starting EMI and hence repays the loan faster.
Accelerated Repayment Scheme offers you a great opportunity to repay the loan faster by increasing the EMI. Whenever you get an increment, increase in your disposable income or have lump sum funds for loan prepayment, you can benefit by: Increase in EMI means faster loan repayment Saving of interest because of faster loan repayment You can invest lump sum funds rather than use it for loan prepayment. The return from the investments also gives you the comfort of paying the increased EMI.
50
Purpose HDFC Home Extension Loan makes it convenient for you to extend or add space to your home. Be it an additional room, a larger bathroom, or even enclosing an open balcony. Maximum loan 80% of the cost of extension. This is however subject to valuation of the property as assessed by HDFC. Maximum Term 20 years subject to your retirement age Applicant and Co- Applicant to the loan Home Loans can be applied for either individually or jointly. Proposed owners of the property, will have to be co-applicants. However, the co-applicants need not be co- owners.
Interest Rate
Wef : 1st Aug 2011 Applicable Rates (Monthly Rest Basis) Upto and including Rs 30 lacs Rs.30.01 lacs to Rs.75 lacs Over Rs.75 lacs Fixed rates% 12.25 12.50 13.00 Variable rates% 10.75 11.00 11.50 RPLR: 16.50% Basis% RPLR RPLR - 5.75 RPLR -5.50 RPLR - 5.00
51
Loan Feature
Loan Amount Interest Rate Tenure Pre Payment Charges Service Charges Upto Rs. 5 crore N.A. Maximum 25 years 2%
ApplicationFee: Upto 1% of the loan amount. BookingFee: Upto1% of the loan amount sanctioned . Pre-closure charges: 2%
52
53
54
A. Income
You need to consider the amount of money that you earn as well as the stability of your income. Many people choose to take a more expensive home upfront as they think that their income will increase as a result of their income growth and career progress. This will make even large EMI payments an ever decreasing percentage of their monthly expenses.
Some of the questions that you need to answer before making this decision are: How much increase do you expect on a yearly basis? How confident are you in getting this raise? Is there any risk of you losing your job such that you might not be able to afford to pay the EMI? What are your chances of getting a new job in case you lose your present one? Will large EMI payments interfere with your goals of retiring early, taking a mid career break, or even paying for your children's education and marriage? Will your spouse continue to work and financially contribute to the household during the tenure of the home loan?
55
B. Personality
No two people have the same personality or attitude towards debt. Some people can sleep soundly at night knowing that they owe Rs.30,000 per month for the next 25 years. Other people worry about taking a loan for such a long tenure. Know your personality type can you live with a big loan or would you feel safer with a small loan?
C. Expenses
The home loan lender calculates your loan eligibility based on your current debt and monthly expenses. You must identify whether you might have other expenses that you currently do not have, but expect to incur in the near future.
Do you have plans to buy a new car? Where will you fund the EMI for the car from?
Have you planned for your children's college education and marriage?
Will you need money for these activities, and will you still have enough to pay fund these after your home loan EMI?
56
D. Lifestyle
In life one has to prioritize ones goals and activities to achieve what is important to us. Are you willing to change your lifestyle to get the house you want? Maybe if you cut your spending a little, the bigger loan just might be within your reach. Ask yourself whether you and your family can handle:
Less frequent expenditure on entertainment movies, eating out, latest cell phones
Sometimes you do not realize how much of your money is going towards useless expenditure. If you can cut down on this, then maybe you can afford a bigger home loan. Discuss with your family the pros and cons of taking a bigger loan and cutting down your family's lifestyle related spending. And do remember that it always pays to compare home loans before taking any decision.
57
Bibliography
www.rbi.org.in
www.indiahousing.com
www.google.com
www.statebankofindia.com
www.icicibank.com
www.hdfcbank.com
www.apnaloan.com
www.axisbank.com
58
www.loanboss.com
59