Point to keep in mind while applying for a home loan?
- Compare eligibility criteria and loan amount institutions will disburse
- End purpose of the loan like buying new flat, new plot with intent to construct or buying old property
- Interest rate and equated monthly installments
- Type of interest whether it is fixed or floating and is on a reducing basis or otherwise
- Processing fees
- Prepayment charges and pre-closure fee
- Look up reviews by other users to know their experience
Types of home loan available?
Different types of home loans are available:
- Home loan to purchase new house or apartment
- Home loan to purchase plot and build your house
- Home extension loan
- Bridge loan
- Balance transfer
- Top up loan
- Home improvement loan
- Home conversion loan
- Land purchase loan
Apart from home loan, down payment and bank charges what additional charges does a new homeowner have to bear?
If you buy a house or property you have to pay registration charges, stamp duty, legal fees and transfer fees.
What other charges for people buying a new house?
- You have to pay booking fee and processing charges to lending institution and to the builder. This could be fixed amount or a percentage of loan amount.
- Prepayment penalty: Some banks levy prepayment penalty if you pay up the loan amount before end of tenure and this could be about 2% of the amount prepaid. Recent RBI guidelines forbid levy of prepayment fee on floating rate home loans.
- Stamp duty and registration charges for transfer of property are to be paid at the sub-registrar’s office
Can I include co-applicant for home loan?
- Yes. If your co-applicant also has an income then you can apply for higher loan.
- You can provide additional instruments like bonds and LIC policy as security to gain higher loan amount.
What is amortization schedule?
This is a detailed breakup in a table that shows principal amount and interest amount and reduction of the gross amount over monthly payments.
How is EMI Calculated?
Equated monthly installment or EMI is split into the principal amount and interest on principal amount divided across the tenure that may be 10, 15 or 20 years. Some institutions will show higher interest amount in initial stages and lower principal, with interest progressively reducing as you go on making payments that should be made on a fixed date to avoid penalty.
What is the maximum tenure available?
You can apply for a home loan with repayment spread over 5 years minimum and maximum 25 years and this varies from one institution to another. They will also consider the remaining years of your life during which you have repayment capacity, retirement age and the age of 65, whichever comes earlier.
Do I get tax benefit on home loans?
Tax benefits are available under section 80C and section 24 but with a limit of Rs. 1 lakh for principal and Rs. 1.5 lakhs for interest repayment.
What is tenure for home loans for NRI
- NRIs can avail home loans from Indian financial institution but maximum tenure is restricted to 7 years.
- Repayment starts on loan disbursal.
- If loan is disbursed in part then you make payment only of interest on the disbursed amount.
Any tax benefits for NRIs?
NRIs not paying income tax to Indian government cannot claim any tax benefits. Only if they file local tax returns can they claim tax benefits.
Does bookmybank.com charge for its services?
No bookmybank.com services are absolutely free.
What about security and safety of data I submit bank
Bookmybank.com assures full privacy and security of your data. We do not share data with any third party, except the institution to which you want to apply for a loan. We have secure servers and secure logins to guarantee security and privacy in addition to electronic and physical security measures and NDAs with staff.
What happens after my online application is submitted to bank
- Our experts scrutinize the electronic documents and if they are acceptable then the entire set is forwarded to the institution specified by you in your application. After that staff from that institution will contact applicants for further process.
- Meanwhile bookmybank staff will update you on status of your application through SMS or email. You can also view status online by logging in with user name and password.
Documents to be submitted by salaried people for home loan?
Identity proof: passport, PAN card, driving licence, Aadhar card (any one)
Photographs of all applicants
Defence or Govt ID cards for respective employees
Residence proof: Valid passport, aadhar card, bank statement/passbook with entries not older than 3 months, telephone bill, electricity bill less than 3 months old, piped gas bill less than 3 months old, defence/govt ID card with address, mobile bill, water bill, letter from officer maintaining electoral rolls, residential certificate from Municipal Corporation, FRRO certificate/Passport (For expats) (any one)
Property purchase agreement less than 3 months old with positive CPV
Signature verification by bank
PAN Card with website validation
PF Cheque clearance
Relationship proof if there are coapplicants
Office address proof or in lieu: shop and establishment certificate, sales tax/VAT registration/Factory registration/SEBI registration certificate
Map of property
Sale deed with registration particulars
Previous chain links with registration in respect of that property
If applying for construction loan or renovation:
- Latest 2 month’s salary slips for government staff, 6 months slips for private employees
- IT returns for last two years in form 16 or ITR with computation of income
- Bank statement for 6 months with salary credit
- Bonus slips for 2 years with bank credit, if applicable
- CTC letter from HR with bank credit and monthly reimbursement slips
- Proof showing job continuity for 2 years (for private employees and newly joined staff)
- Cheque towards processing fees
