Home Loan
One of the prerequisites of buying a new property is a home loan. The process of acquiring a home loan can be confusing and tedious. Take a look at the following points that offers information on home loans.
Various varieties of housing loans are offered by different financial institutions. Prominent among these are:
This is the basic housing loan for the purchase of a new home, which covers the cost of the flat, deposits and charges, stamp duty and registration charges.
These are for the purpose of undertaking repair works and renovations in a home that is already owned by you.
Bridge loans are for people who wish to sell their existing house and purchase another one and need finance for the new house until a buyer is found for the old one.
A balance transfer indicates the paying off of an existing housing loan and availing of a loan with a lower rate of interest.
Refinance loans are taken to pay off the debt incurred from private sources such as relatives and friends, for the purchase of your present house.
These loans are designed as per the requirements of NRIs who want to buy a house in India.
Any Indian citizen, including Non Resident Indians, with a steady source of income can borrow funds for financing the cost of a flat from housing finance companies and banks.
Yes, depending upon the eligibility criteria and policy of the bank.
Loans are generally disbursed between 70%-80% of the cost of the flat. The balance money is to be funded by the flat purchaser from his own contribution. The percentage of loan would vary from bank to bank.
All projects at Saanvi Nirman are preapproved for the grant of home loans by leading housing finance companies and banks. The Saanvi Nirman sales team liaises with the all leading Housing Finance Institutions for project approvals, processing the loan, documentation and disbursement of loans.
Equated Monthly Installment ("EMI") is the amount comprising a portion of the interest and the principal loan amount, which is payable by a borrower to the lender every month.
Interest rates vary from time to time and from institution to institution. The interest is calculated either on a daily or monthly reducing or yearly reducing balances.
A fixed-rate housing loan is a loan where the rate of interest is constant through the entire term of the loan period.
A floating interest rate loan is a loan where the interest rate payable is linked to the bank's internal prime lending rate (PLR) such as the base rate which rises and falls as per banks policy.
Repayment period options range generally from 5 to 20 years. Some of the banks may give loans up to 25 years also.
Processing Fees are payable to the lender on applying for a loan and can either be a fixed amount not linked to the loan or may also be a percentage of the loan amount.
Prepayment Penalty between 1% and 2% of the amount being prepaid is charged by some institutions when a loan is paid back before the end of the agreed duration. Many banks now don't levy penalty on partial prepayment.
Franking Charges as per prevailing rate of Government Authority.
The flat purchased is the primary security and is mortgaged to the lending institution till the entire loan is repaid. Additional security such as life insurance policies, shares, bonds, fixed deposit receipts, national savings certificates can also be offered, as per the requirements of the institution.
Yes. Many lending companies require 1 guarantor or a co-applicant.
Varies from bank to bank but usually it is 15 - 20 days for a salaried person and 20 - 30 days for a self employed person depending on the applicant's documents.
Usually loans are disbursed within 10 - 15 days after completion of verification by the institution, documentation (original agreement for sale / lodging receipt) and completion of all relevant procedures. Submission of proof that the borrower's own contribution has been paid by him to the vendor / builder / developer is also an important aspect.
Yes, but this policy varies from bank to bank.
The standard list of documents required of all loan applicants is as follows:
For salaried individuals:
For self-employed individuals:
For partnership/private limited companies:
For NRIs:
Tax Benefit information
Availing a home loan comes with multiple benefits. Home loans let you achieve your goal of buying a new home and make you eligible for tax benefits. These tax benefits can contribute towards your EMI flow and savings. Take a look at the following points and calculate your tax benefits based on your loan amount.
In the case of self-occupied property acquired or constructed out of borrowed funds, the deduction available for interest on capital borrowed is Rs.2,00,000/-. In case of a rented property, the whole of the interest amount is allowed as deduction. The interest on borrowed fund in pre-construction period is allowed over a 5 year period commencing from the previous year in which the house is acquired or constructed.
The limit of repayment of housing loan qualifying for deduction u/s 80C is Rs.1,50,000/- (including Stamp Duty, Registration Fee incurred for the purpose of transfer of such residential house property).
Section 54 of the Income Tax Act provides relief to an individual or Hindu Undivided Family from capital gains arising from transfer of a residential house held by the assessee at least for a period of 36 months. Such capital gains to the extent utilised for purchase (within 1 year before or 2 years after the date of sale) or construction (within 3 years of date of sale) of a single residential house in India is exempt u/s 54. If the amount of capital gains is proposed to be utilised, but is not so utilised up to the due date for filing of return then, the amount of unutilised capital gain is required to be deposited in the "Capital Gains Account Scheme, 1988".
Section 54F of the Income Tax Act exempts long term capital gains arising from transfer of any long term capital asset other than a residential house. Such capital gains to the extent utilised for purchase (within 1 year before or 2 years after the date of sale) or construction (within 3 years of date of sale) of a residential house is exempt u/s 54F. To be entitled to this exemption the assessee should not own more than one residential house other than the house sold as on the date of transfer. The provisions of depositing the unutilised capital gain in the "Capital Gains Account Scheme, 1988" as explained above is also applicable.
Section 54EC of the Income Tax Act provides relief from capital gains arising from transfer of any capital asset on or after 1st April 2000 shall be exempt to the extent such capital gain is invested within a period of 6 months after the date of such transfer in the long term specified asset provided such specified asset is not transferred or converted into money within a period of 3 years from the date of its acquisition. However, the investment made on or after 1st April 2007 in the long term specified asset by assessee during any financial year cannot exceed Rs. 50 lakh. For claiming this exemption, the capital gains have to be invested (investment not to exceed Rs. 50 lakh during the FY in which the original asset is transferred or in the subsequent FY) within 6 months of the date of transfer in notified bonds issued by:
a) National Highways Authority of India (NHAI)
b) Rural Electrification Corporation Ltd. (REC)
EMI Calculator
(http://bakeri.com/inner/emi.html)Real Estate FAQ's
As you buy a new home, these questions will answer all common queries about buying and owing a property in India. Use this guide to acquaint yourself with rules, laws and important information.
There are various implications of entering into a lease agreement such as you have to pay the stamp duty, the lease agreement has to be registered etc.
Yes. The RBI may grant permission to a foreign citizen of non-Indian origin/foreign companies if the property is purchased for residential use and the consideration is paid by way of foreign exchange.
NRIs can also be:
Non-resident Indians become residents of India once they come back to India to engage in employment, for carrying on any business or vocation, or for any other purpose indicating a definite intention to stay in India for an indefinite period.
By registering the transaction of an immovable property, it becomes permanent public record. Title or interest can be acquired only if the deed is registered.
If you purchase a new flat within two years of the date of sale of the original flat and invest the entire amount of capital gained into the new flat, you will not have to pay any capital gains tax.
For instance, 70 per cent tenants out of a total of 32 tenants are ready to form a co-operative housing society.
There is no new provision in the new Rent Act regarding the prescribed percentage of tenants willing to form a society.
Approach the Registrar of Co-Operative Societies and file the various relevant documents.
A notice is sent to the tenant, failing which a court case may be filed. It usually takes 10 to 20 years to reach a verdict.
Yes, tenants of an old, repaired building can form a co-operative housing society without the landlord's permission. Assume there is a lease agreement for 6 years for a shop with a built-in escalation clause at the rate of 20 per cent after 3 years. The lease expires on a specified date say, March 31, 2000 and the concerned landlord has sent a written letter. It is always advisable to make a new agreement with the landlord.
There is no prescribed norm for determining the market rent rate though it can be easily found out by approaching individuals such as brokers, registration authority, etc.
Buying Tips
The first step towards buying a property starts from being able to identify the one that suits your needs and fits your budget. With best rates and best quality homes, Godrej Properties offers you a perfect home. However, it is important to select the property depending on following criteria:
| Parameter | Questions to be asked |
|---|---|
| Affordability | Does the location fit your budget? |
| Place of work | How far is the office from the desired location? |
| Market place | Where is the nearest market? |
| School | Where is the nearest school? |
| Public transport | Are buses/trains easily available from the location? |
| Builder | Does the builder have a good reputation in the market? |
| Availability of water and electricity | Is there a steady supply of both? |
| Residential/ commercial | Commercial areas face traffic jams during working hours and level of noise is rather high |
| Hospital/ Medical services | Are they available easily? |
| Society expenses | Is the monthly outgo on the society and maintenance a strain on your budget? |
| Security | Are the security systems in place, like a professional guard or electronic systems? |
| Parking | If you own a vehicle, you will need space to park it |
| Type of ownership | In some areas, property is available only on a power of attorney or "pugree" basis. Getting funding for such properties is a problem. |
| Self constructed property (SCP) | SCP is a situation where you buy a plot of land and construct a house there. All banks may not fund such projects. |
| Under construction property at an early stage | Many banks may not prefer to fund such projects. But if the builder is well reputed then it should not be a problem. |
In case of a ready / resale property, you need to bear the following additional points in mind while selecting a property
| Parameter | Questions to be asked |
|---|---|
| Chain of title | It is important to have all the proper registered documents from the proposed seller that declares his ownership. These documents are important for you to garner a loan from the bank. |
| Maintenance | Check the internal as well as the external condition of the building |
| Water leakages | A flat with water leakages should be strict no as it adversely impacts the overall condition of the building. |
| Condition of the flat | Is the paint peeling off or concrete crumbling? |
| Neighbours | Grumpy neighbours can make life very unpleasant. |
| Society transfer charges | If they are too high then you need to factor that in your budget. |