MCQ ON MORTGAGE LOANS

Please Note the probable MCQs on Mortgage Loan:

1. Equitable Mortgage can be created only at notified place declared in the Official Gazette by
State Government.
2. Equitable Mortgage is done by depositing Original Title Deeds of the property at Notified
places
3. CERSAI (Central Registry of Securitisation, Asset Reconstruction & Security Interest of India)
is a “Central Registry” set up as per provision of SARFAESI Act to avoid fraudulent
transactions under mortgag4
4. Under CERSAI the following charges need to be registered:
a. All Types of Mortgages to be registered
b. Charge on Hypothecation of Plant and Machinery, Book Debt Receivable, Intangible
Property
5. Purchase Products are (Purchase of New Asset) : i) Housing/Home Loan ii) Land Loan iii)
Non-Residential Property(NRP) { Disbursement will be made to the seller}
6. Leverage Products are (Loan against Existing Assets): i)Loan Against Property (LAP) ii)
Balance Transfer/Top-up (BT-Top up); iii) Lease Rent Discounting (LRD) {Disbursement will be
made to the Borrower}
7. Obligations / EMIs with less than 12 months remaining are not considered as part of Fixed
Obligation.
8. Stamp Duty & Registration Charges to be included, only in case of dwelling units whose
Cost of Property is less than Rs 10 Lakhs
9. In case of independent house construction, cost of construction is to be estimated and
approved by the bank’s empanelled Valuer
10. LTV Ratio is the Ratio of Bank’s Loan Amount to Property Value
11. LTV for Home Loan is decided by RBI. For other type of Mortgage loans LTV is decided by
individual banks.
12. LTV depends on the type of the mortgage loan and other factors like loan amount, type of
property etc.
13. Margin is the Borrower’s Own Contribution ( i.e. difference between Cost of Property and
Bank’s Loan)
14. Please note LTV for Home Loan slab is:
a) Upto Rs.30 Lacs  90%
b) Rs. 30 Lacs to Rs.75 Lacs  80%
c) > Rs.75 Lacs  75%

15. Please note LTV for Non Residential Property (NRP) for Doctors is same that of Housing
Loan(i.e. upto Rs.30 Lacs- 90%; Rs.30 Lacs to Rs,75 Lacs – 80% & Above Rs.75 Lacs – 75%)
and for Others : i) Self occupied property – 70% & Others – 60%
16. LTV for Lease Rental Discounting (LRD) is : Flat 70%
17. Reimbursement against actual expenditure incurred not be taken into account as Income.
Eg. Telephone expenses, Medical bill etc.
18. Agriculture Income: Only 50% of Average of 2 years to be taken into account and the same
should have been declared in last 3 years IT Returns
19. Interest/Dividend Income: Only 50% of Average of 2 years to be taken into account and the
same should have been declared in last 3 years IT Returns
20. LIC Commission, Broker commission, LIC/NSC/KVP/IVP/ Postal Savings Commission : New
Business  50% & Renewal Business 100% to be considered for Income

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21. Performance Bonus/ Incentive : 50% (Please note to divide the same by 12 i.e. convert
Monthly)
22. Rental Income : If ITR Available  100% of average of last 2 years

Lease agreement and rental credits (Not appearing in ITR)  75% of current rental income

23. Minimum property area for considering the Home Loan: 400 Sqft
24. Minimum and Maximum Home Loan amount: Rs.8Lacs & Rs.500 Lacs
25. Balance Transfer (BT) will be considered for fully disbursed Housing Loans Only
26. Rate of Interest on Home Loan for Balance Transfer (BT) + Top-up Loan up to the original
limit sanctioned by Other Bank/Financial institution is same
27. FOIR is Fixed Obligation to Income Ratio is the percentage amount of total monthly income
which a person can use for payment of EMI, after having fully covered all living expenses for
self and family, and EMI of any other loans they may have
28. INSR is the ratio between proposed instalment to net salary. ( existing obligations are not
considered )There is a ceiling on the maximum permissible FOIR/INSR based on applicant’s
salary
29. While calculation of the eligibility of Housing loan the lowest among eligibility under i) LTV
ii) FOIR and iii) INSR will be considered
30. Pre Closure/Prepayment under Floating Rate of Interest is permitted without any Penalty
31. SWAP: Changing from one repayment method to another. Customer exchanging Post Dated
Cheques / Auto Debit / NACH from one bank to another is known as SWAP
32. SWITCH: SWITCH means moving from one contracted ROI to another bringingreduction in
EMI or tenure or both.
33. Three types of Prequalified Offers are : There are three types of PQ offers:
i. Home Loan PQ
ii. Top-up Loan PQ
iii. Loan Against Property (LAP) PQ
34. Bank’s Floating Rate of Interest on Housing Loan is linked to RLLR (Repo Linked Lending
Rate)
35. External Benchmark Rate ( EBR ):Effective since 1st October 2019 and applicable to all new
Floating Rate retail loans granted to individuals and MSEs
36. ICICI bank adopted Repo Rate as the external benchmark for retail loans.
37. Under Floating Rate of Interest: Spread is constant and REPO rate is variable.
38. Minimum and Maximum amount of of Home Loan is:
Minimum Rs 8 Lacs Maximum Rs 500 Lakhs
39. Maximum period of Home Loan is : 30 Years (for Salaried & Self Employed Professionals) and
15 Years for Self Employed Non-Professionals.
40. Minimum Area for sanctioning Home Loan is: 400 Sqft
41. Maximum Home Loan eligibility for Self Employed is : 100% FOIR & FOIR + LTV= 130%
42. Advantage of Extra Home Loans:
i. Salaries and Self-Employed persons are eligible who can get a loan of up to 2.00
crores
ii. Dual advantage of improved affordability and a longer repayment period.
iii. Allows you to enhance Loan amount by up to 20%
iv. Option to extend repayment tenure up to the age of 67 years (65 years for middle
aged salaried-up to 48 years of age)
v. The enhancement in loan/repayment period is backed by Mortgage Guarantee.
vi. EXTRAA Home Loans are offered in association with Indian Mortgage Guarantee
Corporation (IMGC)
vii. Guarantee fee to be borne by the borrower

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43. PRATHAM Home Loan for salaried Class of Rs.10,000/- p.m and repayment period upto 20
years. Age limit from 21 years to 70 years; and the loan amount will be Rs.5.00 Lacs to
Rs.50.00 lacs.
44. PRAGATI Home Loan for borrowers in unorganized sector with min. salary of Rs.10,000/-
with one year of service, Loan Period:20 Years; Loan amount: Rs.5.00 Lacs to Rs.50.00 lacs.
45. Installment on Housing Loan is exempted upto Rs.1.50 Lacs under Sec.80.C
46. In case of Co-borrowers, both husband and wife can avail exemption under Sec.80C of IT
ACT upto Rs.1.50 Lacs each
47. Under section 24 of Income Tax, deduction for Interest Paid on Housing Loan for
i. Self Occupied house property up to Rs 2 Lakh is exempted for Tax
Computation
ii. For let out property - No upper limit for claiming interest.
iii. In case of joint property both are eligible to claim rebate under Section 24 of
IT Act, upto a maximum of Rs.2 lakhs each, subject to repayment also
being made proportionately.
48. To consider Lease Rental and Discounting (LRD), residual lease terms would be : Min. 3years
and Max. 15 years
49. LRD will be considered only for Commercial properties rented to established Corporates,
Nursing Homes, Schools, Hospitals, Marriage Halls/marriage Gardens, Warehouses etc.;
Limit of LRD is: Min.Rs.10 Lakhs and Max. Rs.300 Lacs.
50. Under LRD OD facility up to 90% and Term Loan up to 10% can be sanctioned.

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