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Home Loan

Are you looking forward to purchase your first house? Searching for a home is exciting, exhausting and a little terrifying, especially in this market. In the end, your plan is to end up with a home you adore at a price you can manage to pay for. Arm yourself with the list mentioned below to compare and narrow down the choices to get the best for you.

A Home Loan is exactly what it sounds like – a loan to purchase a house. This house may be ready for possession or under construction. Till the full repayment of the loan with interest, the property is mortgaged to the financial institution as a security. Thus, it is sometimes referred to as a Mortgage Loan.

HOME LOAN INTEREST RATES

To lend a helping hand to our visitors, LoanUncle has consolidated all the necessary information regarding current rate of interest on home loans provided by popular banks at one place.

Bank Name
Interest rate
HDFC Ltd 8.50% – 9%
PNB 8.50% – 8.90%
ICICI Bank 8.65% – 9.5%
SBI 8.60% – 8.70%
DHFL 8.68% – 8.70%
Indiabulls 8.65% – 8.70%
Tata capital 8.65% – 9%
HOME LOAN Information

A Home Loan is exactly what it sounds like – a loan to purchase a house. This house may be ready for possession or under construction. Till the full repayment of the loan with interest, the property is mortgaged to the financial institution as a security. Thus, it is sometimes referred to as a Mortgage Loan.

This is differentiated from loans wherein you use your existing property as security. Home Loans are obtained to spend on the property itself; using property as a security allows you to obtain loans for other purposes.

The Structure

Banks usually dispense Home Loans with either adjustable or predefined interest rates. Similarly, payment terms may be alterable or fixed. It can be repaid in full or in installments. In a Floating Rate Home Loan, the interest rate on your loan varies during the loan tenure. Lenders have their individual benchmark rates to determine their respective floating rates. In Fixed Rate Home Loans, the interest rate is predetermined, irrespective of market conditions. This kind of Home Loan is unaffected by changes in RBI interest rates.

The particulars of the payment vary with each bank and are unique to your property and credit rating.

The Ideal Time

Home Loans are most suitable for times when you want to buy a property immediately. If the property is likely to increase in its market price in the future, it is sensible to borrow. Ensure you have a good income to installment ratio. Never borrow more than you have the ability to repay. The maximum tenure of repayment is circa thirty years. Considering the fact that you pay interest according to the number of installments or your time window, choosing a tenure as short as possible reduces your interest rates and saves you unnecessary costs. Be regular with your installments. Untimely payments not only negatively impact your credit scores but also accumulate your dues.

One golden rule of borrowing is not using loans for investments. Should the market price crash, not only will you have suffered a losses on the property itself but will also be burdened with your repayment of the loan. And of course, compare and calculate the amount of interest you’d have to pay on the offers from each bank and pick the one most suited for you. And this is where we are here to help out.

HOME LOAN Documents Required

When it comes to documentation, banks differentiate between people on the basis of the nature of their employment. The three categories are salaried professionals, self-employed professionals, and self-employed non-professionals. Note that requirements vary across banks; the following list constitutes those documents that are most often mandatory.

DOCUMENTS SALARIED SELF EMPLOYED PROFESSIONAL SELF EMPLOYED NON PROFESSIONAL
Application form with photograph duly signed
Identity, residence and age proof
Last 6 months bank statements
Last 3 months Salary-slips
Processing fee cheque
Form 16 / Income Tax Returns
Proof of business existence
Business profile
Education qualification certificate and proof of business existence
Last 3 years Income Tax Returns with computation of Income
Last 3 years CA Certified / Audited Balance Sheet and Profit & Loss Account
HOME LOAN BALANCE TRANSFER

Home Loan Balance transfer: Feeling the interest burden of your existing home loan? Relax! Transfer your home loan to a lower interest rate with a Home Loan Balance Transfer. Further, you also have the option of a Top-Up loan over and above the balance you transfer.

Just by switching you existing home loan from higher interest rates to lower interest rate lender can save you thousands or sometimes in lakhs. And it really don’t mean saving the interest. You can anyway use the same at anything. After all, securing a home loan is not the end of journey.

Once the balance amount will be transferred to lower interest rates, the EMI will automatically gets lower. Here you go. A penny is saved is a penny earned.

To know how LoanUncle could help you in it. Quick Query – 9999-6636-04 or support@LoanUncle.org

Home Loan Eligibility

To be eligible for a Home Loan, you must be an Indian citizen of the age of twenty-one or above. By the time the loan is entirely paid off, you should not have exceeded the age of seventy.

Increasing Your Eligibility

When applying for a Home Loan, a good credit ranking always increases your chances at acquiring any form of monetary assistance from financial institutions. Similarly, maintaining a steady flowing income, habitual savings, and regular investments is an indicator of your reliability as a client. Moreover, having an earning family member as a co-applicant assures the bank that your chances of defaulting are fewer. Not having many dependants on you for sustenance is also considered a positive factor. Essentially, preserving a stable financial record makes it easier to convince financial institutions to give you loans.

Furthermore, your property must be insured against common hazards to receive a loan on it. It also helps to ensure that your property is free from ‘encumbrances’ – liabilities such as unpaid loans or bills.

FREQUENTLY ASKED QUESTIONS – FAQS ON HOME LOAN

How do I go about acquiring a Home Loan in India?
This is where LoanUncle steps in. For no charge, we are available to guide you through the entire process of availing of the loan most suited to you.

1. The first step, of course, is to choose your property;
2. Make sure all the property’s documentation is in order;
3. Make sure all your documentation as a client is in order using LoanUncle’s documentation guide as an aid;
4. Calculate your eligibility through LoanUncle’s eligibility guidelines;
5. Do your research about the different lenders who might be willing to provide you with a loan. for this, you may seek quick help from LoanUncle by calling quick query center;
6. Compare loan possibilities from different financial institutions, and choose and apply for the one most suited to you;
7. Wait for your bank to check your documents and credit scores, sanction your loan, and send you an offer letter;
8. Revert with an acceptance letter, agreeing to the terms and conditions of the loan;
9. Submit the originals to all your documents to the bank.
10. And that’s all! Then your lender disburses your loan amount and this process ends.

Does the agreement for sale have to be registered for me to obtain a Home Loan?
Yes. The registration takes place at the office of the sub-registrar appointed by the State Government under the Indian Registration Act, 1908.

What security/collateral must I provide to avail of a Home Loan?
Your collateral could be in the form of one or more guarantors or your life insurance policies. You may also offer a surrender value in the form of shares, which should be equal to the loan amount.

Who can be a co-applicant to my Home Loan?
The co-applicant/co-owner of your property is someone who’s financial assistance you seek to pay your loan. The usual co-applicants are one’s spouses, parents, or children.

Can I pay off my Home Loan before time?
Yes, prepayment of home loans is allowed. This is executed when you pay up a lump sum. Generally, no penanlty is levied by banks on prepayment of home loan.

What additional charges will I have to incur to obtain a Home Loan?
Processing Fee – this may either be a percentage of the loan amount or the bank’s predetermined fixed amount;
Commitment Fee – this is levied if you are unable to repay your loan within the determined tenure;
Pre-payment Charge – this amount will not exceed 5% of the loan;
Miscellaneous Charges – some banks may levy charges for documentation screening, consultation, etc.

What is the tax benefit on Home Loans?
The first benefit you obtain is upon repayment of the principal amount. It is considered under Section 80C of the Income Tax Act, with a maximum tax deduction of Rs.1,50,000. Furthermore, upon repayment of the interest, you can avail of tax benefit on the interest amount under Section 24 of Income Tax Act, with a maximum limit of Rs.2,00,000.

Some other property loans include:

Home Loan Balance Transfer – for when you find a Home Loan with interest rates lower than your existing Home Loan, and use this new loan to pay off the previous one;
Home Improvement Loan
– for house renovation;
Home Extension Loan – for when you’re planning to expand your house by, for example, adding a new room or wing;
Land Purchase Loan – for when you want to invest in land, whether to build a structure on it in the future or not;
Loan Against Property – for when you need cash to invest in business or elsewhere against the property you have.

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