Some general information for Home Loan seekers:

  • As per bank norms you are eligible for a loan up to 60 times of your net income per month.
  • Net income is the income excluding LTA, PF, TDS and Medical Allowance.
  • The eligibility is calculated on the basis of repayment capacity of the applicant on a monthly basis.
  • The more the tenure, the lesser the EMI and more number of lakhs can be borrowed.
  • The lesser the tenure, the more the EMI and less number of lakhs can be borrowed.
  • However increasing the tenure implies that one will ultimately end up repaying more as interest will be levied on a longer duration.
  • Opt for Step Up Loan: These are loan products that take into account the increase in incomes of individual over the period of loan repayment. This kind of a home loan has lower EMI in the initial stages which is increased in a step wise manner as the income of the borrower increases with time. Thus the total amount eligible is now calculated on the basis of a higher income that the current earnings which can increase the amount substantially. This a smart move for young professional who want to invest in properties right from the beginning of their earning career.
  • Seek clarifications regarding the fees for:
* Processing the loan.

* Prepayment charges.

* Ppread, i.e., the difference between the PLR and the rate actually charged on the loan.

* Charges for conversion from one loan rate structure to the other and the reset period clause for the floating rate loans.

* If one wants to borrow home loan on a fixed rate then one must check out whether the fixed rate is applicable for the entire period of the loan or whether it is attached with a money market clause whereby the fixed rate is changed after a certain period of time depending on the money markets or internal policies of the lender.

 

  • If possible one can also seek a copy of the agreement copy and read it carefully before taking a decision.
  • The loan amount can be increased or decreased after it has been approved or sanctioned. But it needs to be done prior to the disbursement of final loan amount is done.
  • Home loan seekers can also take loan for Interior Decoration. Banks offer loan for interior decoration which is 10 to 15% of the total cost of the flat / house.

Documents required for Home Loan:

  • Completed loan application
  • 2 to 3 Passport size photograph
  • Proof of identify (photo copies of Voters ID card/ Passport/ Driving licence/PAN card)
  • Proof of residence (photo copies of recent Telephone Bills/ Electricity Bill/ Property tax receipt/ Passport/ Voters ID card/ Gas Connection Bill)
  • Proof of business address for non-salaried individuals
  • Statement of Bank Account/ Pass Book for last six months
  • Signature identification from present bankers
  • Personal Assets and Liabilities statement

For guarantor (In case required):

  • Personal Assets and Liabilities Statement
  • 2 passport size photographs
  • Proof of identification as above
  • Proof of residence as above
  • Proof of business address as above
  • Signature identification from his/her present bankers

Additional documents required for salaried persons :

  • Original Salary Certificate from employer
  • TDS certificate on Form 16 or copy of IT Returns for last two financial years, duly acknowledged by IT Deptt.

Additional documents required for Professionals/self- employed/ other IT assesses:

  • Acknowledged copies of three years I.T. returns/ Assessment Orders.
  • Photocopies of challans evidencing payment of Advance Income Tax.