Frequently Asked Questions
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Loan eligibility Rate of Interest, charges, etc. Terms and conditions Property ownership Security Documentation Repayment Tax Benefits
General Loan Eligibility 1. How much loan am I eligible for? Ans.: The HFI, on the basis of your repayment capacity, decides on your loan eligibility. Your monthly Income is taken into consideration by the HFI for this purpose. Every HFI sets certain norms on the amount of instalment, as a percentage of the monthly income that can be accepted as being affordable. The HFI then uses these norms to arrive at loan eligibility. 2. Will the co-applicant's source of income be included in arriving at my eligibility? Ans.: If the co-applicant receives income from a regular source of income that has been consistent, then such income would be considered for the loan eligibility calculation. Every HFI has certain acceptable relationships of the co applicant for inclusion of income. For certain types of income, however, HFIs insist on regular Income Tax returns being filed every year on time. For e.g. - for tuition income or tailoring income. If these returns are available then it will be included. Interest income, however, will not be considered for calculation of loan eligibility. 3. Will the Repayment track record of my previous loans, be considered in computing eligibility? Ans.: If you have availed of a loan from any other bank, the repayment track record will be taken into consideration while determining your loan eligibility. A very good track record of repayment will prove favourable in deciding your repayment capacity. The loan instalments of these loans will also be taken into consideration while calculating the FOIR as per norms of the HFI. 4. How do I improve my eligibility for the loan? Ans.: Some of the ways to improve eligibility are stated below: Include a co applicant to the loan whose income can be considered. Opt for a Step
Why does the HFI need to judge my repayment capacity when it is holding my property as security? Ans. experience. the quality of your earning (speculation and other non recurring income such as capital gains is normally not included in evaluating your repayment capacity) is considered.: The HFIs in India use the mortgage only as a collateral security. However.: Most HFIs do not consider any income by way of cash unless supporting documents for the same are produced. the laws to enable the HFI to recover the property in the event that the borrower defaults) are very time consuming and difficult to enforce.e. The HFI also gives due weightage to your age. if the proof for cash income is produced by way of either photocopies of the voucher or a statement from the employer that would reflect the same along with relevant entries in the bank statements. If you provide proof of the HRA amount that you will receive on vacating company accommodation. It's advisable for you to buy a property where the agreement discloses the entire value of the house. 6. your past repayment history. This is because the HFI is not in a position to establish the genuineness of the cash income without proper evidence. Include all costs as mentioned in the definition of Cost of Property if LTV is a problem. 7.: The HFI looks at your earning capacity both present and future to make a judgement call on your repayment capacity. If you are currently staying in a company accommodation and are planning to move out once you buy the property. I under declare the amount of my income? Will it affect my loan eligibility? Ans. This is because the foreclosure laws (i. You may also be eligible to opt for a Flexible loan instalment plan (Under this scheme your alternate sources of income after your retirement will be considered to enhance your loan eligibility if you are nearing your retirement age). will it be considered for loan eligibility? Ans. include it in your monthly Income for calculating loan eligibility. Some portion of my income is by way of cash. Provide proof of cash income received.Up Repayment facility (Under this scheme your instalment will keep increasing at periodic intervals thereby enhancing your loan eligibility) to avail of a higher loan. 5. you may become eligible for HRA from your company. Your existing obligations. employer and your qualifications to arrive at your repayment capacity. How does the HFI judge my repayment capacity for a home loan? Ans. As a result the HFI relies more on your earning capacity and your ability to repay rather than your security value. 8. This is because the HFI is not in a position to establish the genuineness of the
.: Yes your loan eligibility will be affected if you under declare your income. Especially if your eligibility is constrained by LTV (Loan to Value) norms. This also help's from any tax implications at a later point in time and in increasing loan eligibility. the HFI may consider part or full income based on the nature of such cash income.
: You can apply for a loan even if you have only 1-2 years of experience. However. if the proof for such income is produced.: Normally. both the employer and the bank share the right on the property as per the proportion of the loan amount disbursed by them. sister. most HFIs will take into account your past experience in the relevant field.undeclared income without proper evidence. This means that a parent-son combination and a husband-wife combination is only allowed. income is generally under stated and the earning potential of such individuals is higher that what has been disclosed. I intend to co-own. In a second mortgage the HFI only has second priority if it comes to recovering the money by way of disposing off the property. in case of default in repayment.: Most HFIs allow only immediate relatives to co-own a property. Will I be eligible for a loan? Ans. Can a NRI avail of a housing loan? Ans. your qualifications and the nature of your business. if you are self-employed. They recognise the fact that in such cases. the terms and conditions for a NRI loan are different than loans granted to Residents of India. To meet this shortfall he may want to approach a HFI. 9. I have1-2 years experience as a salaried professional/ self employed. is not allowed to join in as a co-owner as he is not eligible to enter into a contract as per law and therefore the HFI cannot enforce the contract on a minor. 10. However there are times when the customer who has availed of a loan from his employer (available at subsidised rates) may find the amount insufficient to meet his needs. I have taken a subsidised loan from my employer am I still eligible for a loan from a HFI? Ans.
. Under declaration of income is not advisable as it could result in Tax implications. however. mother. the HFIs would go in for a pari passu mortgage or a second mortgage. Second mortgage is acceptable only if the first mortgage lies with the President of India. the HFI may consider part or full income based on the nature of such cash income. However. (All central government employees mortgage their property with the President of India if they avail of a loan from their employer) 13. In such a case. 12.: Most HFIs offer special privileges to self-employed professionals. HFIs prefer to have the first right on the property for which they provide loan. The HFI also decides on the qualifications required for such professionals to qualify for the relaxed norms for loan eligibility calculations. A minor. However. Do professionals have special eligibility norms? Ans. NRI's can avail of a housing loan to buy a property in India. In a pari passu mortgage. Am I eligible for a loan? Ans. the property with my brother. father.: Yes. Only then will an HFI offer you finance for purchasing a property. Every HFI has its own conditions regarding the type of professionals they would cater to. 11.
However. How does the HFI arrive at the Instalment of Income Ratio (IIR) Percentage? Ans. The IIR is normally fixed by the HFI on the basis of their perception of your repayment capacity every month. In case you fail to provide either. I have only a few years to retire? Am I eligible for a loan? Ans. years of experience. About 25% of your income gets deducted by way of statutory deductions and for investment purposes. For more details on the FLIP scheme. The parameters on which the IIR is typically based are your actual salary details. alternate employment prospects and sources of other income. IIR= (EMI x 100)/(Net take home pay)
Corp Home . You can also opt for a FLIP scheme to enhance your eligibility. The HFIs justify this 40% with the following assumptions. If you have a son who is working or if your wife has a few more years left for her retirement. This leaves back 40%.Loan for Housing purposes
. Do I need to be married to get a home loan? Ans. This can be filled in either by a parent or by a spouse. You also need to spend at least 25% of your income to meet your monthly expenses.14. qualifications. if you have any or if you avail of one in the future. if any. you can apply for a loan even if you are single. 15. 16. some HFIs insist on a co applicant for the loan. The IIR is normally restricted to about 40% of your monthly gross income. employer / business. you can make them a co applicant and take a loan.: Yes. you can get a loan even if you have only a few years to retire. which is taken as your repayment capacity for this loan.: No. growth prospects. About 10% of your income is spent on other loans. kindly refer our product content. you need to provide at least one Guarantor.: There is a limit on the IIR that a person can afford and this calculation varies from one HFI to another.
co obligation of parent/s (irrespective of their age) or third party guarantee is required. above above above Margin crore crore 3 for to to crore 2 3 Loan Amount Rs. they should join as co applicant only. v Where property is held in joint names. v Where property is owned by applicant’s parents/spouse who do not have independent/ regular income.) shall not go beyond the retirement age. v Age of the borrower/s shall be between 18 years to 60 years subject to the condition that repayment period (including repayment holiday if any. v Applicant /Co applicant must be confirmed in the service & should have two years of aggregate service in previous & present employment together. 500 lakh Rs. 15 lakh Rs. Loan Amount: Area Metro & Port Town Centres Urban Centres Semi Urban & Rural Centres Loan amount is based on location of the property. v In addition to spouse. where the property to be mortgaged is jointly owned by close relatives. 30 lakh Rs. Purpose : v For construction of house/flat. 3. applicant is unmarried/divorcee. irrespective of their age. all the joint holders should join as co applicants to the loan. all the joint owners to join as co applicants. v For take-over of housing loans from other Banks/Institutions. 2.1. 4. v If. in case of salaried class. maximum of one close relative as co applicant required for supplementing repayment capacity. 50 lakh Rs. in case of other than salaried class. irrespective of their age and numbers. v However. 25 lakh Loan for Site Rs. Eligibility: v Residents /NRIs/ PIO holding Indian Passports conforming to normal borrower standards with independent & regular source of income. and 70 years of age. 10 lakh
Loan: crore crore :
25% 30% 35%
4[a] Repayment Period: Age of the House/Flat
Margin for Loan
. purchase of ready built house/ flat.
6. v If. co obligation of parent/s (irrespective of their age) or third party guarantee is required. Guarantee: v Third party guarantee at the discretion of the Sanctioning Authority. applicant is unmarried/divorcee. v Wherever. 5.1.[Maximum age of the House/Flat shall not Amount. loan only for construction of house may be sanctioned with a margin of 35% on cost of construction. v Wherever third party guarantee is not stipulated. Mortgage of house / flat Security: purchased out of Bank Finance. v Repayment period not to exceed retirement date for salaried persons and 70 years of age for other than salaried persons. 7. Site/Plot has already been mortgaged as security for any other credit facility. Rate [Intrest Rate is [with effective 1] Fixed Rate: of linked from to 1st the Interest: Base Rate December.00 Crore Up to 10 years 20% 25 years Above 10 years & up to 20 years 20% 20 years Above 20 years & up to 30 years 25% 15 years v Property mortgaged for housing loan is the primary security. co obligation of Spouse is mandatory. Period exceed 30 years] Upto Rs.
30 lakh 12.65% 12. v Housing loans under Fixed Rate of Interest is offered upto 20 years only.90 %
10.65% 12. * Wherever initial repayment holiday period is given.15% 12.15% 12. except in cases.65% 12.15% 12.65 % 9.90% 11.Loan Tenor
Up to Rs. This is may result in extension of payment period due to interest rate variations.65%
Above 15 years & up to 25 12.75 lakh & Aaove
Up to 5 years Above 5 & upto 15 years Above 15 years & upto 25 years
9.40% 11.30 lakh & upto Rs.75 lakh 10.15%
Above Rs.65% 12.40% 9. 2] Floating Rate: Loan Tenor
Up to Rs. EMI will be fixed at the
.75 Rs. EMI
* The EMI stipulated in Credit Sanction Intimation while sanctioning of loan will remain the same during the entire tenor of the loan irrespective of revision in rate of interest during the tenor.15 % 9.15%
Above Above Rs.15% 10.30 lakh 9.15% 12.15%
Rs.15% years v Maximum tenor under Fixed rate loans restricted to 20 years for salaried class and 15 years for other category of borrowers.65% 10.40%
Above Rs.20 lakh
Up to 5 years Above 5 & upto 15 years
12.90% 10.30 Rs.75 above & up to lakh Rs.20 lakh & upto Rs.65% 12.20 lakh & lakh and lakh below Rs. where initial repayment holiday period is given. The rate of interest will be reset at the discretion of the Bank once in 5 years.
v In case of construction of house.10. Eligible Income:
Regular & verifiable income is only considered . However.7500/upto Rs. satisfactory status of the previous loans etc.10. is considered subject to borrower’s income/ repayment capacity. Pension.50% of loan subject to min Rs. Business income.50% of loan subject to min Rs.Rs. are permitted to be added in the project cost. v All housing loan limits availed for purchase of/ construction/ repair/renovation/ extension etc.& max. are clubbed together for the purpose of charging Rate of Interest. wooden fittings/racks & Italian Kitchen etc.2 lakhs.2..000/..7.20 lakh 12.5 lakh 0. 10. 11. cost of such items not to exceed 10% of the loan amount sanctioned.2500/.50% of loan subject to min Rs. cost of permanent fixtures such as wardrobe.500/-& max. Pre 0.Rs.Rs.50% of loan subject to min Rs . Project Cost: v Loan for construction/purchase of house in Agricultural land not to be permitted under the Scheme. Maximum number of Housing loans permitted: v Maximum of three housing loans...500/Above Rs.In case of seasonal income. v Cost of Solar Water Heating System may also be considered as one of the components of project cost v Where loan is availed for construction of house/purchase of ready built New flat/New house or flat/house under construction. Rs. quarterly/half yearly/ yearly installments are also considered HUF income is not considered. 9. v In case of ready built flat/flat under construction.& max.20 lakh Above Rs.000/. sale agreement can include cost of parking area. subject to the maximum of Rs. Registration Charges.15 lakh & 0.Salary.1. Stamp Duty. VAT/Service Tax etc.15 lakh Above Rs. Agricultural income are eligible .& max.5 lakh & 0. project cost includes construction of compound wall.000/ Payment Penalty:
a) Prepayment charges shall not be levied when the loan amount is paid by the borrowers out of their own fund/sources
.000/upto Rs. v Project cost consists of purchase price.50.beginning of repayment period depending upon the balance outstanding in the account. Processing Charges: Up to Rs.
Prepayment charges shall be levied as under: 0. First time takeover of loan only is permitted) v Repayment period should not exceed leftover repayment period of transferor bank OR repayment period prescribed under the Scheme in relation to age of the property OR Balance life of the property. v Where loan is availed for purchase of site & construction of house thereon. v Re-Scheduling of loan to lower tenor is not allowed under the Scheme. where rate of interest charged is 12% and above . whichever is shorter v Loan amount should not exceed 75% of market value or Balance outstanding at
. 15. rate of interest is charged to such loan is COBAR+0. v From Fixed to Floating :The existing fixed rate loans including those already subjected to reset.50%+3% and the interest at this rate is applicable from from the date of initial disbursement of loan. Conversion Charges : v From Floating to Fixed : 1% of the outstanding balance. inclusive of up to date interest as on the date of conversion. Take over of Loan: v Take over of housing loan availed with other banks/ Institutions/ employer permitted v Take over of loan from first financier is only permitted (i. v Construction should commence within 12 months.e. loan for purchase of site/plot/land and construction of house thereon are considered.00% on on loan loan amount amount prepaid under the floating prepaid under the fixed rate rate option option
13. can be converted to floating rate at the option of the borrower at any time during the currency of the loan by payment of conversion charges at 2% on the loan amount outstanding as on the date of conversion. v The existing fixed rate loans including those already subjected to reset.b) In all other cases. Loan for Site & Construction of House: v Under the Scheme.50% 1. v Construction should be completed with in maximum of 24 months. v In case of default in construction of house. cost of site/land should not exceed 60% of project cost. 14. where rate of interest charged is below 12% can be converted to floating rate at the option of the borrower at the time of next reset by payment of conversion charges at 1% on the loan amount outstanding as on the date of conversion.
v loan for enhancement treated as separate loan. in such cases. v In such cases. Corp Flexi Loans:
The Scheme is to facilitate the younger borrowers expecting income growth in the years to come. value of the property must be 150% of the total loans availed against such property. v Next 5 years.(100%) v Next 5 years. PLEASE AVAIL THE FACILITY UNDER `CORP GHAR SHOBHA SCHEME' 18. EMI is based on present repayment capacity for normal loan entitlement. (The scheme is only for salaried class) Option-1: v loan amount will be 130% of the normal entitlement. 19.transferor bank whichever is lower v Age of the property not to exceed 25 years. However loan amounts are aggregated for computation of rate of interest. v First 5 years. and would like to avail higher quantum of loan than the normal eligibility. Second Loan for Enhancement: v Enhancement of loan may be permitted during pre EMI or post EMI period. Loan against Second charge/ Pari Pasu Charge: v In case of resident individuals such as employees of Government/Reputed Institutions/ Organizations /Corporates. in tune with increase in income. installments will be flexible/progressive/ step up. normal EMI. v Loan against second charge not considered. Option-2: v loan amount will be based on present repayment capacity. Under the scheme. who have already availed housing loan from their respective employers by mortgaging the property in favour of the employer. For Repairs/Renovation/Extension:
FOR REPAIRS/RENOVATION/EXTENSION/IMPROVEMENT/FURNISHING OF HOUSE. 16.
. 17. EMI will be for balance repayment period on the balance outstanding at the end of 10th year. EMI at 70% of normal EMI. housing loan is considered on a selective basis only against Pari-Passu charge. v First 5 years. EMI will be normal for full loan (130%) v Balance period.
21.v Balance period . 20. Insurance: v Property to be covered under Insurance under Reinstate value method. v In case of flat/ property is under construction. Premium amount is added to loan amount. loan is released in stages depending upon the progress of construction. No reimbursement of purchase price permitted under the scheme. EMI will be for balance repayment period on the balance outstanding at the end of 10 th year. Other Conditions: v No relaxation permitted from the prescribed margin. Disbursement: v Loan amount directly remitted to the seller. 22. v Certificate from employer regarding salary structure for the next 5 years compulsory.
. v Insurance of the mortgaged property is mandatory and the insurance premium borne by the borrower. Corp Griha Raksha:
Insurance of the borrower under Corp Griha Raksha considered at the option of the borrower.