Once you have booked a Navami property, our in-house financial advisers will provide you with all the banking formalities support you require. You can either choose your own bank or we will be happy to recommend. Once the selection of the bank is complete, we will ensure that all the procedures to acquire your home loan will be hassle free.
Home loan is a secured loan offered against the security of a house/property which is funded by the bank’s loan. The property could be a personal property or a commercial one. The Housing Loan is a loan taken by a borrower from the bank issued against the property/security intended to be bought on the part by the borrower giving the banker a conditional ownership over the property i.e. if the borrower is failed to pay back the loan, the banker can retrieve the lent money by selling the property.
There are different types of home loans available in the market to cater borrower’s different needs.
Interest rates differ from bank to bank and normally they range from 9.95% to 16%
Most banks adopt the yearly reducing-balance method, which accounts for your principal repayments only at the end of their financial year. As a result, you pay interest on the principal that you have already returned to the bank. The effective interest rate is therefore higher than the quoted interest rate by around 0.7%. Some banks may also follow the daily or monthly reducing-balance method, which results in a lower interest burden.
Fixed rate of interest means that the interest rates remain FIXED for the entire duration the loan. This means that you do not benefit, even if the rates of interest drop in the market.
Floating interest rate means that this rate of interest that fluctuates according to the market lending rate.
EMI or Equated Monthly Instalments refers to the fixed sum of money that you will be paying to the bank every month. The EMI comprise of both interest and principal repayment. The amount of the EMI depends on the quantum of loan, interest rate applicable and the term of the loan.
The maximum period over which one can pay the loan varies for every bank, and is also different for every scheme. Also your residential status makes a difference. If you are a resident Indian, you could avail of a loan for duration of 5-20 years. Few banks offer a 20-year repayment period, generally at a higher interest rate. As a Non-Resident Indian, you can only avail of a loan for a maximum period of 7 years.
The maximum amount that you can borrow depends on factors such as:
Besides, your residential status (whether resident Indian or Non-Resident Indian) will also be significant on the maximum quantum of loan that you can borrow. Typically Home Loans are provided for in the range of 75%-85% of the cost of the property, including cost of land.
Your eligibility is determined by your repayment capability, taking into account, factors such as:
The most important concern of banks in determining your loan eligibility is that whether or not you are contentedly able to pay off the amount you borrow.
Every bank has its own list of documents that one should submit at the time of application. The common documents that the banks ask at the pre-approval stage are:
Yes, your salaries can be clubbed for the purpose of calculation of the loan amount. This can be done either when the property is jointly held with the spouse or the spouse stands as a guarantor.
If all the necessary documents are in order it takes around two weeks for the processing of one’s application and takes 1 more week for the bank to inspect the property papers and make the disbursement.
Approval is valid for 3 months to give you enough time to choose a flat/house of your choice.
Yes, you are eligible for tax benefits on the principal and interest components of the loan under the Income Tax Act, 1961.The benefits could differ each year; do check the current benefits available.
Note: Majority of information has been derived from various banks of India. For more information regarding home loans please contact our CRM.