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It is important to choose a good Housing Finance Bank or finance company which can handhold the customer right through his home buying process. Since a home loan is a long term commitment of 10-25 years, several factors like expertise, quality of service, in-depth domain knowledge and the bank’s/company’s level of commitment and transparency right through, the loan procedures, the fine print, quality of services offered and safe retrieval of the title deed are critical.
Home loans can be used to buy new property, 2nd sale property as well as under construction property. Banks generally provide 80% of the property value as a home loan. The balance has to be arranged as the initial down payment to the builder/ seller. One can arrange the balance from savings, securities, fixed deposits, life insurance or through a personal loan. Nowadays some builders provide fully furnished flats to enable higher loan amounts. This also reduces the cost of furnishing the house on possession. Home loans are available from Rs.20 lakh to Rs.5 crore.
Pre-Approval
Once you decide to invest in a home, you can apply for a Home Loan. Yes, even before you have selected the property. This is basically an individual credit approval based on the financials and Personal Identification documents like Photographs, Photo Identity, Signature Proof, Date of Birth Proof, etc. Refinancing is also possible within 6 months from the date of purchase of property, wherein the entire amount is already paid by the buyer/customer.
How is Eligibility Calculated?
Various factors are taken into account when assessing the repayment capacity. Income, age, number of dependants, qualifications, assets and liabilities, stability/ continuity of employment / business and subject to maximum provided by the bank, to name some factors.
How can eligibility be increased ?
Your spouse can be a co-applicant if he/she is earning. The incomes can be clubbed to enhance your loan amount.
You can also include Parents/Children as Co-Applicants for higher eligibility.
Additional securities like bonds, fixed deposits and LIC policies may also help to enhance eligibility.
Requirements
Min Age should be 21 years when the loan is sanctioned.
The loan tenor is from 5 years - 25 years subject to a maximum till 58/60 years or retirement, whichever is earlier in case of salaried and for self-employed before 65 years.
The final amount to be sanctioned will depend on the repayment capacity.
Co-Applicant can be taken for overcoming the age barrier as well.
List of Documents Required For Home Loan:-
- General Documents
- 4 Photographs of all applicants
- Bank Application form with photograph duly signed by all applicants
- Identity Proof of all applicants (copy of Pan Card, Passport, election ID)
- Residence Proof. (Copy of Ration Card, Electricity bill, Tel. bill, Gas bill, LL Agreement)
- Proof of qualification.
- If any Loan running then please Provide Loan Repayment Track Record.
- Processing fee cheque
- Property Documents
- Original Chain of Agreement along with stamp duty and registration paid Receipt.
- NOC from Society/Builder.
- Share certificate
- Receipt of Self Contribution.
- For Salaried
- Latest 6 Months Salary Slip. And latest salary increment letter.
- Latest 12 Months Updated Bank statement of Salary account.
- Latest 2 Years Form-16. Last 3 years ITR
- For Self Employed
- Business Proof along with Company Profile. (BMC Property Tax paid bill and Receipt, Shop & Establishment, society maintenance.
- Latest 3 years ITR set duly certified by CA.
- Latest 12 Months Updated Bank statement of Current and saving a/c.
Project Approval:-
In case a customer buys an under construction property then the project has to be approved by the bank.
List of Documents Required To Avail Project Approval. These documents are to be collected from the developer to procure APF status (Approved project file) :-
- Copy of Sale Deed/ Lease Deed/ Development Agreement of the builder
- Copy of development agreement if executed or Power of attorney from landowner
- Earlier chain of documents (if any)
- Layout Approval
- Approved Building Plans / IOD
- Commencement certificate from municipal council/ corporation
- N.A permission and latest N.A tax receipt
- Latest 7/12 Extract
- 6D extract for 13 years
- 8A Extract if applicable
- Copy of ULC clearance certificate
- Title report for the Property under consideration
- Partnership Deed /MOA/ AOA of the builder
- Copy of Draft Sale Agreement
- Extract / Property Card Extract in the name of the Landowner
- Copy of Recently issued Title Clearance Certificate.
- Builder Profile on letter head.
- Project Broucher
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