Loan Against Property in Delhi NCR & Lal Dora
MORTGAGE LOAN FAQs:
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What are the documents required for applying for a loan against
property?
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For Salaried:
1. Application form with
photograph
2. Identity and Address
Proof
3. Latest 6 months Salary
Slips
4. Form 16
5. Bank Statements (Last 6
months)
6. Processing fee cheque
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Who can avail a Mortgage Loan?
Both Salaried as well as
Self-Employed people can avail Mortgage Loan, irrespective of the
income.
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What is the difference between a Home Loan and Loan against
Property?
There is a huge difference
between a Home Loan and a Loan against property. Home Loan is
taken only for the purpose
of buying a residential property whereas a Loan against Property can
be taken for any purpose.
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What is the minimum loan amount?
The loan amount depends on
your repayment capability and is restricted to a maximum of 80%
of the agreement value of
the property (incl. registration and stamp duty) or fair market value,
whichever is lower.
Repayment capacity takes
into consideration factors such as:
1. Income
2. Age (Min. 21 Years)
3. Property Valuation
4. Existing Liabilities (if
any)
5. Current Work Experience
6. Financial Documents
7. Number of Dependants
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Mortgage Loan FAQ’s
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8. Qualifications
9. Spouse's income
10. Assets &
liabilities
11. Continuity of
occupation
12. Savings history.
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How would the value of my property be determined?
The value of the property
would be determined through a valuation conducted by the Loan
Provider.
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What are the loan tenure options?
Ans. You have the option of selecting a term you are comfortable
with, ranging upto 20 years,
provided the term does not
extend beyond your reaching 65 years of age or retirement age,
whichever is earlier.
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How is the interest charged/calculated?
There are two schemes:
1. Fixed Rate Home Loans
2. Adjustable Rate Home Loans –
Predominantly this is what’s available today
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If you opt for an
Adjustable Rate Home Loan, the interest rate would vary with the Bank Home
Floating Reference Rate.
Under the Fixed Rate Home Loans the rate applicable on the date of
disbursement remains fixed
during the entire duration of the loan.
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How much time will it take for my loan to be approved?
It takes 2 weeks for your
loan to be sanctioned after you have submitted all the documents.
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Who can be the co-applicants for the loan?
You could include your
spouse as a co-applicant for the loan and we shall include his/her income
to enhance your loan
amount. Further, in case there are any other co-owners they also need to
be co-applicants.
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Is a personal guarantor a must?
Ans. No, there is no personal guarantor required in most cases.
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What security/collateral do I have to provide?
Ans. Typically, the security for the loan is a first mortgage of the
property to be financed, by way
of deposit of title deeds
and/or such other collateral security as may be necessary. The title to
the property should be
clear, marketable and free from any encumbrances.
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What are the stages involved in taking a loan?
1. Application
2. Processing
3. Documentation
4. Legal
Verification/Valuation
5. Sanctioning of the Loan, whereby you get an approval for a specific loan amount
based on
the value of your property
and repayment capabilities
6. Disbursement
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Mortgage Loan FAQ’s
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What are the various types of loans available?
1. Home Loans
2. Land Loans
3. Home Equity Loans
4. Office Premises Loans
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All of these are available
on an adjustable rate or a fixed rate.
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What is a Monthly Reducing balance?
An Equated Monthly
Installment (EMI) has 2 components, interest and principal. When the
interest is calculated on
monthly rests, the principal on which the interest is charged goes down
every month. This results
in a significant saving for the customer over the tenure of the loan.
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What is an Annual Reducing balance?
An Equated Monthly
Installment (EMI) has 2 components, interest and principal. When the
interest is calculated on
annual rests, the principal reduces only at the end of the year.
Therefore, you continue to
pay interest on a portion of the principal that you have already
actually paid back to the
lending company.
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When can I apply for a loan?
You can apply for a home
loan even before you have selected your property. The loan amount
would be sanctioned or
approved for you, based on your repayment capability.
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When will the loan be disbursed?
Your loan will be disbursed
on:
1. Your identification and selection of
the property.
2. Submission of the legal documents.
3. Legal and technical clearance of the
property
4. Investment of your contribution towards
the property
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What is an amortization schedule?
An amortization schedule is
a table giving the reduction of your loan amount by monthly
installments. The
amortization schedule gives the breakup of every EMI towards repayment
interest and outstanding
principal of your loan.
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What are the tax benefits of taking a home loan?
The tax benefits on a home
loan, under the Income Tax Act, are two-fold:
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1. Principal repaid :
Rebate under section 88 (2) of the Income tax Act is available to
individuals on repayment of the principal
portion as given below:
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Mortgage Loan FAQ’s
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Moreover, the rebate is allowed
up to the maximum limit of Rs.20,000 per financial year on the
repayment of the principal
sums, which need not be out of income chargeable to tax of the year
in which such repayment is
made.
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2. Interest repaid: Under section 24 of
the Income Tax Act , in case of self-occupied
property, deduction is
allowed up to Rs.1,50,000 per annum for houses acquired or constructed
with capital borrowed after
March 31, 1999 as long as the acquisition or construction is
completed within 3 years
from the end of the year in which such loan is taken.
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Can I get IT certificates in the name of both the Applicant and
co-Applicant separately?
As per the IT rules only
one certificate can be issued for a home loan and hence one certificate
will be issued in the name
of both applicant and co applicant.
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When is the IT certificate issued?
The IT certificate will be
issued at the end of a financial year. You can expect to receive your
copy of the IT certificate
in the month of April or May.
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How can I get the tax benefit during the year?
You can request for a
provisional IT certificate that can be issued any time during the course of
the year.
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Is there any processing fee charged by the Bank?
Yes, a nominal fees and
charges are to be paid to the Bank depending upon their terms and
conditions. The general
range is 0.25% to 1% depending on various factors.
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Does the property have to be insured?
Yes the property has to be
insured against fire, flood, earthquakes and other appropriate
hazards during the tenor of
the loan.
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How can I repay my loan?
The repayment of loan is
done through Equated Monthly Installments. It can be paid through
Post Dated Cheques (PDC) or
Electronic Clearance System (ECS)
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Can I pre-pay my loan?
The loan against property
can be pre-paid along with the pre-payment charges. Usually the bank
charges 2% of the principal
pre-paid. Though many banks are moving to a zero pre-payment
regime in currently
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