home loan

Acquiring a home loan is a crucial part when you purchase a home. Therefore, prior knowledge of home loans is essential so that you choose the one best suited to you. Banks also advocate home loans and approve them often. A home can now be purchased in a few weeks and there have been cases where people have moved into their dream home within a few days after obtaining their loan.

Our loan department is a quick and easy solution for project loans for builders. We value your time and money and hence assure you of quick processing of your project loan. When you take a home loan, you must ensure that you take the right steps towards purchasing your dream house.

Our team follow the highest standards of ethics, integrity and most importantly transparency in our workings. We promise to guide you in every step of the way.

The following points will help you to get a better insight into the process of a home loan.

Who can avail housing loan?

Following categories of individuals, in the age group of 18 to 55 years are eligible for housing loans:

Salaried individuals confirmed in the service with minimum service of 3 years.

Individuals engaged in business & self-employed persons like doctors, chartered accountants, architects, and others. Such persons should have been in the business for a minimum period of 3 years.

Eligibility relating to upper age limit is relaxed selectively, subject to certain conditions. However, the entire loan should be cleared before the borrower attains the age of 70 years

What is the purpose of sanctioning a housing loan?

  • For purchase of ready built house/flat
  • For the construction of house/flat
  • For purchase of site and construction of a house thereon
  • For undertaking expansion of the existing unit, upgradation, and creation of additional amenities
  • For undertaking repairs and renovations, subject to a ceiling of Rs.15.00 lakhs
  • For taking over of the HL liability from other Public Sector Banks/Private Banks and NBFCs.

Is the housing loan sanctioned for purchase of site only?

No. Housing loan is not sanctioned for purchase of site only.

What is the quantum of the loan?

The maximum loan is four times gross annual income of the concluded financial year OR four times of average gross annual income of preceding four financial years. A higher quantum is considered selectively

Minimum Net income/Net take home salary after meeting the installment of the proposed Housing loan should be 40%. This can be relaxed selectively to 25%.

Is the income of the family reckoned for arriving at loan quantum?

In the case of salaried individuals/businessmen/self-employed persons, the income of the family may be taken into account, subject to documentary evidence, for the purpose of computing the quantum of the eligible amount of loan.

But in the case of 2nd Housing loan, an income of the only spouse can be clubbed for this purpose.

Can the income of the spouse be taken to determine repayment capacity?

Yes, where family income includes the income of the applicant and the spouse, the spouse’s income is reckoned to determine the repayment capacity and compliance of NTH stipulation, provided such spouse joins execution of loan documents.

What is the maximum eligible quantum of loan for repairs and renovations?

Maximum eligible quantum of housing loan is Rs.15.00 lakhs for repairs & renovations.

Is agricultural income considered for arriving at loan quantum?

Yes, Agricultural income is considered if it is supported by land records and income is reported in Income Tax Return, though not taxed.

What is the margin required to be borne by the applicant?

Amount of LoanNew House /FlatOld House / Flat
Up to 10Years OldØ 10 Years Old
Up to Rs.20 lakhs10%20%25%
Above Rs.20 lakhs and up to20%20%25%
Rs.75 lakhs
Above Rs.75 lakhs25%25%25%

 

In case of Repairs & Renewals, expansion of existing unit, upgrading, and creation of additional amenities there is a uniform margin of 25%. Also in case of 2nd & subsequent house, the margin is 25%.

How is the margin computed?

In case of Housing Loans where Project Cost is up to Rs.10.00 Lacs, Stamp duty, Registration Charges, and other Documentation charges can be included in the project cost for the purpose of stipulating Margin as well as for LTV ratio.

In all other cases other than above i.e., cases where project cost exceeds Rs. 10.00 Lacs, the margin shall be stipulated only on the basic Project Cost which shall not include expenses towards stamp duty, registration, and other documentation charges. The margin is computed on the basic project cost which shall not include expenses incurred towards stamp duty, registration and other documentation charges).

When is the margin required to be brought in?

Margin should be contributed before the disbursement of the loan. However, pro-rata and stage-wise contribution of margin is selectively permitted.

Whether and to what extent the reimbursement of the amount spent on housing project is permitted?

Up to 25% of the loan amount is permitted to be reimbursed only in exceptional cases, subject to production of vouchers/receipts/ related documents and claim is made within 3 months from date of incurring expenditure.

Where housing loan is sanctioned for purchase of site and construction of house thereon, what is the maximum period within which the construction of the house should begin?

Construction of the house should commence within a maximum period of 12 months from the date of disbursement.

What is the penalty for not commencing construction of the house within the stipulated period?

Higher rate of interest is charged (Base Rate + 6%) from date of disbursement till the date of commencement of construction.

What is the rate of interest on housing loans?

Up to Rs.1.00 Crore—-Base Rate i.e. 10.00%(floating) Presently.

Above Rs. 1.00 Crore—–Base Rate +0.10%

Currently 10.10% (floating).

Whether pre-payment penalty is charged?

No. Prepayment penalty in respect of housing loans carrying floating rates of interest.

Whether additional interest is charged on loan for purchase of second dwelling unit?

No additional interest is charged in case of loan for second dwelling unit.

Whether housing loan is provided for purchase of third and subsequent dwelling units?

Yes; these loans are sanctioned under Housing Loans “Non-Priority-Commercial Real Estate”. Such loans are charged 1.00% interest over and above regular housing loans.

Can I submit online application for housing loan?

Yes. Through your bank’s website.

What are the repayment terms?

Entire loan together with interest (including repayment holiday if any),shall be repaid in a maximum period of 30 years from the date of disbursement or the borrower attaining the age of 70 years whichever is earlier.

In the case of purchase of ready built house/flat, the repayment should commence one month after the date of disbursement. In the case of construction of a house/flat, repayment should start one month after the completion of the house/flat. However, the maximum repayment holiday cannot exceed 18 months from the date of first disbursement.

Can I avail the benefit of step-up installments?

Yes, on case to case basis based on the generation of income. For details, please contact the nearest branch/Retail Assets Hub

What are the processing charges for housing loans?

Processing charges in the form of the upfront fee shall be collected as a one time measure at the time of submitting the application. The processing charges payable is 0.5% of the loan amount subject to a minimum of Rs.1500/- and a maximum of Rs.10,000/- (subject to change from time to time). Such processing charges will be refunded if the loan is not sanctioned by the Bank.

What are the other charges to be borne by the borrower?

All out-of-pocket expenses like, outsourcing charges, periodical inspection charges, inspection charges, CERSAI Charges, CIBIL Charges, insurance premia, etc need to be borne by the borrower.

What security has to be provided?

The house property shall be mortgaged to the Bank. If mortgage is not possible for any valid reasons, suitable collateral security in the form of NSC/KVP, bonds, Bank deposit can be provided.

In case of loan for flat under construction, if putting through of mortgage is immediately not possible, then what is the procedure?

Then in case of only those projects which are approved by our Bank, a loan is considered provided TRIPARTITE AGREEMENT i.e. the agreement between Builder, Borrower, and Bank is executed & a suitable guarantee of a person acceptable to Bank is furnished.

Whether there is an option for our existing housing loan borrowers (in respect of housing loans carrying floating rates of interest) for switching over from higher rates of interest to the recently reduced card rates.

Yes, It is permitted on payment of switch over fee of 1% of the outstanding liability and after satisfying certain other conditions. You may contact your lending branch for more details on this.