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Home Loan Information

Lucky are the people who cherish their dream of having their own home. It has become very easy now to get a loan provided you know which product works the best for you. Home Loan is one of the most important type of loans being availed by both salaried of self-employed individuals who wants to buy a new residential property or renovate an existing one or built on a plot of land or extend a house. Home Loan also comes as a important service Source provided by banks across India because it is the most secured form of lending.

Facts Check

• Secured Loan

  : The home loan is secured against the property which the customer is buying. The under-construction or ready to move in house remains mortgaged with the lender Banks till the entire loan is paid off along with EMI and other incidental charges.

• Loan Insured

  : Loans can be insured provided customer has taken life insurance against unforeseen circumstances. Property insurance does not cover protection against job loss or life loss. One must evaluate all eventualities and opt for insurance which covers all aspect of insecurity.

• Loan default case

  :In case of EMI defaults / loan defaults, where customer is not able to pay for EMIs, the lender has the right to sell your property to settle all outstanding amount till the time agreed as per agreement or the usage of funds.

• Loan to Value Ratio

  : This is the amount up-to which loan can be issued to a borrower. Differential amount is to be paid by borrowers. The lenders can loan up-to a %age value of property keeping in mind the market rate fluctuations in case of defaults.

• Income Requirement

  : Regular flow of Income is required for regular payment of EMIs. So loan eligibility is calculated basis net take home monthly income as an individual and also as a family. Banks/Lenders are interested in their money and interest income and do not like to get into selling of properties of defaulted customers for the recovery of loan amount including charges

• In case of Default

  : o Re-structuring of loan: Lenders / Banks can either tome down EMIs or convert it into easy instalments which can be negotiated with the Bankers. However, it is 100% a Banks call to take. o Grace Period : Customers can negotiate for the EMI free period from the Banks in case of some income problems but the final tenure will be increased accordingly. o Property confiscation and Auction: After all negotiations and restructuring fails and a customer is still not been able to make payment of EMIs, Lender has the right to confiscate property through leaglp rocess and auction it on behalf of customer/borrower. o Payment settlement: The proceeds of the auction is used by Banks/ lenders to settle all outstanding dues and if there is any leftover money over the outstanding dues, it is transferred to the borrower/customer.

The steps generally followed for buying a home are

• Identify property
• Check APF approval from banks
• Apply for Home loan from the banks which has approved the project as it will be faster there
• Arrange for own contribution ( 10%-25%* ).
• Take sanction from bank
• Take disbursement.

Home Loan Features

• Longer tenure of 5 to 30 years
• Pre payment part payment and foreclosure without any charges.
• Only interest payment or tranche EMI payment in case of under constructed property
• Switching from floating to fixed ROI and vice-versa allowed but with a fee.
• One can take top up after 6 months of taking home loan if valuation supports
• Rates are linked to Repo, MCLR or RPLR
• Loans are given by Banks and Housing Finance Companies
• Customer can switch lender any time by providing List of documents that are mortgage, Foreclosure letter and Loan account statement

Home Loan Types

• Home Purchase
• Home Construction
• Home Improvement
• Plot purchase
• Home extension