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WHAT IS A HOME LOAN?

Home Loan is a Secured Loan offered against the security of a house/property


which is funded by the banks 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.
Impacts of RBI rates on Home loans July 2013
RBI Governor D Subbarao on 15 th July raised the cost of borrowing under the
marginal standing facility by 200 basis points and narrowed the window of
borrowing for banks from it to just 1 per cent of deposits at Rs 75,000 crore citing
the need to "restore stability to the foreign exchange market".
The rates are around 10% and expect them to be there for at least a month.
Home loan rates in last six month have average dropped by 2-3 % by most
Banks.

Budget Bonanza for Home loan customers 2013 - Additional one lac deduction
of interest allowed for home loans
upto 25 lacs.

Home Loan applications received for 225,861 crores till 20 August 2013

SBI Home Loan: Before borrowing any loan borrower compare
interest rates. Generally people prefer to take SBI Home
Loan because SBI (State bank of India) is main centralized and
national bank. SBI provides loan at comparatively low interest rate

HDFC stands for Housing Development Finance Corporation. It
has counseling and advisory services for acquiring property. It
provide loan from any office for purchase of home anywhere in India.
It gives Loan approval even before a property is selected. Because of
flexible feature and transparent policy, most people prefer. HDFC
home Loan for their requirement

ICICI Bank Home Loan: ICICI Bank offers a wide range of Housing
Loan products, designed to meet the requirements of customer. ICICI
home loan offers Doorstep service, Speedy loan sanction, Simplified
documentation and Loan amounts ranging from Rs. 2 lakh to Rs. 3
crore Rupees only.
MOST BORROWED HOME LOANS
Name Loan Amount Minimum Salary
Requirements
Tenure
SBI Home loan It will be determined taking into consideration such
factors as applicants income and repaying capacity,
age, assets and liabilities, cost of the proposed
house/flat etc.
Not Available Maximum 30 years or up to the age
of 70 years of the borrower
whichever is early.
ICICI BANK
It depends on the repayment capability and is
restricted to a maximum of 80% of the property value.
Not Available Maximum 20 years
HDFC Ltd Home Loan Max amount up to 80% of the value of the property and also
depend on the repayment capacity of the individual
Not Available 20 years for loans under fixed rate
and 30years under adjustable rate
home loan products
Axis Bank Home Loan
Minimum Rs 3lacs
Not Available Max. tenure is 25 years for salaried
customers
And 20 years for self-employed
customers.
Axis Bank-Empower home
loan scheme a home loan
for self- employed individuals
Minimum Rs 10 lacs
Maximum Rs 100lacs in tier 1 & tier 2 cities and Rs 50
lacs in other cities
Not Available 15 years and age of the borrower
should not exceed 65 years of age at
the time of maturity.
Bank of Baroda Maximum loan amount Rs 100 lacs, maximum finance upto
75-85% of the project cost.
The loan eligibility is as follows
Gross monthly income Rs 20,000-36 times of the gross monthly
salary
More than Rs 20,000-to Rs 1 lac-48 times of the gross monthly
salary
More than Rs1lac-84% of the gross monthly income
Not Available Max tenure is 25 years
Citibank Home loan Min Rs 5 lacs and Max. up to Rs 10 crores Not Available Max tenure up to 25 years.
HSBC Bank
Min. Rs 2 lacs and max Rs 10 crore
Not Available For salaried customers its 25 years
and for others 20 years
LIC Housing Finance
Min. Rs 1lac and max. Rs 150 lacs. Generally the
loan is extended upto 85% of the property value.
Not Available Max. 25 years. The term for the loan
will under no circumstances exceed
the age of retirement or completion
of 70 yrs of age whichever is earlier
Some of the features of home loans offered by different banks
Loan Schemes Up to 30 Lacs From 30Lacs to 75 Lacs Above 75 Lacs
ICICI Bank
Home Loan
Scheme I :10.15% (Fixed 1 yr)
Scheme II : 10.50% (Fixed
2yrs)
Scheme III : 10.50% (Fixed
3yrs)
then 10.15%
Scheme I :10.40% (Fixed 1 yr)
Scheme II : 10.40% (Fixed
2yrs)
Scheme III : 10.75% (Fixed
3yrs)
then 10.40%
Scheme I :10.40% (Fixed 1
yr)
Scheme II : 10.40% (Fixed
2yrs)
Scheme III : 10.75% (Fixed
3yrs)
then 10.40%
ICICI Bank Home Loan

One of the largest Home Loan financing company is ICICI Bank Home Loan. The attractive rate of
interests, simple documentation & fast processing makes the customer to take the Home loan from
them

ICICI Bank Home Loan offers you Home Loan for following purposes
1. Home Loan- If you want to purchase a new home then you can apply individually or jointly.
2. Home Improvement Loan- For your home improvement you can take the Home Improvement
Loan from ICICI Bank.
3. EMI Under Construction- EMI Under Construction helps you to make payments in EMI, in a
partly sanctioned loan for an under construction project.
4. Balance Transfer-ICICI Bank Home Loan gives you facility to transfer your running loan from
an other Bank
5. Top-Up Loan- ICICI Bank Home Loan facilitates the Top-Up Loan, an additional funding against
the security of your property.
Current Home Loan Interest Rates of ICICI Bank Home Loan



ICICI Bank
Home Loan
Scheme I :10.15% (Fixed 1
yr)
Scheme II : 10.50% (Fixed
2yrs)
Scheme III : 10.50% (Fixed
3yrs)
then 10.15%
Scheme I :10.40% (Fixed 1
yr)
Scheme II : 10.40% (Fixed
2yrs)
Scheme III : 10.75% (Fixed
3yrs)
then 10.40%
Scheme I :10.40% (Fixed 1
yr)
Scheme II : 10.40% (Fixed
2yrs)
Scheme III : 10.75% (Fixed
3yrs)
then 10.40%

Salaried Self employed
Age 21years to 65years 21years to 65years
Income Rs.1,44,000 (p.a) Rs.1,50,000 (p.a)
Loan Amount Offered 2,00,000 - 1,00,00000 2,00,000 - 2,00,00000
Tenure 5years-20years 5years-20years
Current Experience 1years 3years
Processing Fee
0.5% of loan amount as
Administrative Fee or Rs.
2,000, whichever is higher
0.5% of loan amount as
Administrative Fee or Rs.
2,000, whichever is higher
Documentation
1) Application form with
photograph
2) Identity & residence proof
3) Latest salary slip
4) Form 16
5) Last 6 months bank
statements
6) Processing fee cheque
1) Application form with photograph
2) Identity & residence proof
3) Proof of business existence
4) Profile of the Business
5) Last 3years ITR
6) Last 6 months bank statements
7) Processing fee cheque

Documentation required for ICICI Bank Home Loan
DOCUMENTS REQUIRED IN HOME LOAN


Generally the documents required to processing your loan application are
almost similar across all the banks; however they may differ with various
banks depending upon specific requirement etc. Following documents are
required by financial institutions to process the loan application:
Age Proof
Address Proof
Income Proof of the applicant & co-applicant
Last 6 months bank A/C statement
Passport size photograph of the applicant & co-applicant
In case of Salaried
Employment certificate from the employer,
Copies of pay slips for last few months and TDS certificate
Latest Form 16 issued by employer Bank statements
In case of Self-employed
Copy of audited financial statements for the last 2 years
Copy of partnership deed if it is a partnership firm or copy of
memorandum of association and articles of association if it is a company
Profit and loss account for the last few years
Income tax assessment order
TYPES OF HOME LOAN
There are different types of home loans available in the market to cater
borrowers different needs.
Home Purchase Loan: This is the basic type of a loan which has the purpose of
purchasing a new house.
Home Improvement Loan: This type of loan is for the renovation or repair of the
home which is already bought
Home Extension Loan: This type of loan serves the purpose when the borrower
wants to extend or expand an existing home, like adding an extra room etc.
Home Conversion Loan: It is that loan wherein the borrower has already taken
a housing loan to finance his current home, but now wants to move to another
home. The Conversion Housing Loan helps the borrower to transfer the existing
loan to the new home which requires extra funds, so the new loan pays the
previous loan & fulfills the money required for new home.
Bridge Loan: This type of loan helps finance the new home of the borrower
when he wants to sell the existing house, this is normally a short term loan to the
borrower & helps during the interim period when he wants to sell the old house &
want to buy a new one, It is given till the time a buyer is found for the old house.
Home Construction Loan: This type of loan taken when the borrower wants to
construct a new house.
Land Purchase Loan: It is that loan which is taken to purchase a land for
construction & investment purposes.

HOME LOANS ELIGIBILITY FACTORS
Home loans are an easy option for buying a house but getting the right amount depends on many factors and this
may depend upon the factors listed below:
Monthly Income
The income that he earns from which he will pay his home loan emi is one of the most important
factors that affect the amount of loan. So if you are salaried your per month income and if you are
self employed, your yearly profit would identify your home loan max eligibility.
The loan amount basically depends upon the net income of an individual and a bank usually
provides home loans up to 60 times of an individual net income. For e.g. if a person take home
salary is Rs 30,000 he /she may be offered a home loan of around Rs 18 lacs. But it may not be so
because a bank takes into account other factors as well while granting a loan.
OTHER EMI
Other Emi (Equally monthly installment) is the emi that we are paying to for any other Loan.
Available Income
The income that is left in our hand after deduction of any emi amount that we are paying for any
kind of loan. Your Home Loan Eligibility Calculator will be calculated after deduction of the EMIs
that you are paying.
PROPERTY ATTRIBUTES
Banks give max upto 85% of loan against the value of the property. So if you want a home loan for
a 50 lac property max that u can get is 85% of that ie 42.50 lacs. This too if in case you have the
income to give the emi of that loan. So based on Income and property value banks decide your
exact home loan eligibility.
Banks also have certain specific criteria before accepting the property for granting a loan. The
banks have specific norms with respect to the minimum area requirements for a flat which may be
carpet area or built up area. The bank also considers the age of the property in case of an existing
property, the location of the property and also the reputation of the builders constructing the
property. The bank also performs a thorough analysis and inspection of the property to check
whether the title is clear or not, or are there any ownership disputes, whether the bank is free from
any encumbrances etc.


DURATION OF LOAN (YEARS)
Its one of the most important factors that one should keep in mind while taking loan. It refers to
the no. of years for which the loan has to be taken. Longer the tenure higher will be the interest
paid and lower will be amount of EMI to be paid and vice-a-versa. It is one of the parameters which
helps in comparing the EMIs from different banks keeping it constant for relationship and easing
the judgment.
Interest Rate (in percentage)
Today there are many lenders in the market. Every bank is offering loans whether its a
nationalized bank, private bank or foreign bank each of them is there in the show. Every bank
offers different rate of interest according to the profile of the customer. So, before finalizing a deal
one should consider deals from various banks and than come to a conclusion. And aware of the fact
that some people might mislead you by charging high rate of interest at reducing rate and might
inform the same at flat rate of interest. So, its always advisable to check full detail with the banks
and do better comparison in respect of EMIs , Tenure and Interest Ratesand keeping tenure as
constant with all the banks will ease your comparison and will result in better analysis, finally
leading to a prudent decision.
EMI
EMI stands for equally monthly installment; you need to pay a particular amount for the Home loan
that you have taken.
ELIGIBLE LOAN AMOUNT
The net loan amount for which you are eligible for your Home loan is said as Eligible Loan Amount.
The loan amount that a Bank can sanction you.
CREDIT HISTORY
The credit history of an individual plays an important role in deciding the amount of loan. Credit
history is basically the credit information report of an individual generated by a credit information
company on the basis of individuals credit records. On the basis of the credit information report an
individual is being given a credit score. Based on the credit score a bank or any other financial
institution decides whether the individual is eligible for a loan or not. The credit history is generally
affected by outstanding credit card payments and any unsecured loans. In India CIBIL is a reputed
credit information company and it analyses the financial records of individuals and awards them a
score which is known as the "CIBIL score.
AGE
Age also plays a crucial role in determining the eligibility for a home
loan. One has to attain a minimum age of 21 to apply for a loan. The
minimum age requirement may be different for different lending
institution. The maximum age may vary from 58 to 65 years
depending on the income source of the individual. The age also
determines the tenure and EMI of the loan. For e.g. if an individual is
35 years of age and retires at an age of 60 then his/her loan tenure
will be 60-35=25 years and his /her EMI will be calculated
accordingly. Longer the tenure lower will be the EMIs. However the
longer the tenure, the costlier the loan is as one ends up paying more
interest rates.
CO-APPLICANT
In order to enhance the eligibility for having a loan one can have a
co-applicant and in this way the total eligible income for having a
home loan increases and thus as a result the loan eligibility becomes
higher. However bank permits only certain relationships to become
the co-applicant, friends and relatives who are not blood relatives to
take a loan amount jointly.
7 Mortgages Loans
Loan Processing Charges / Renewal
Charges (Non Refundable)
0.50% - 1.00% of the loan amount or Rs. 1500/- (Rs. 2000/- for Mumbai, Delhi & Bangalore), whichever is
higher + applicable Service Tax & Surcharge
Prepayment Charges
No prepayment charge on floating rate home loan irrespective of the source of fund

2% of the outstanding loan amount plus applicable service tax and surcharge on fixed rate home loan and
Home plus loan

4% of the outstanding loan amount plus applicable service tax and surcharge on Loan against property,
Lease rental discounting and Non residential premises

For one year, two year and three year fixed rate loan the prepayment charge is 2% of the outstanding
loan amount plus applicable service tax and surcharge till the time loan is under fixed rate. Once loan
moves into floating rate there would be no prepayment charge irrespective of the source of fund
Charges for late payment
Home Loans : 2% per month
Home OD : 1.5% of the outstanding amount subject to minimum of Rs. 500/- & Maximum of Rs.5000/-
Conversion charges for home loan
Floating to Floating0.5% of the principal outstanding plus
applicable taxes

Dual fixed rate to Floating0.5% of the principal outstanding plus
applicable taxes

Floating to Dual fixed rate0.5% of the principal outstanding plus
applicable taxes

Life time fixed to floating
1.75% of the principal outstanding plus
applicable taxes
Cheque Swap Charges Rs. 500/-
Document Retrieval
Charges
Rs. 500/-
Cheque bounce charges Rs. 200/-
Amortisation Schedule Rs.100 per schedule (Inclusive of S.T.)*
Statement of Account Rs.100 per statement (Inclusive of S.T.)*
Final prepayment
statement
Rs.100 per statement (Inclusive of S.T.)*
Duplicate No Objection
Certificate / No Due
Certificate
Rs.100 (Inclusive of S.T.)
Revalidation of No
Objection Certificate
Rs.100 per NOC (Inclusive of S.T.)*
Provisional Income Tax
Certificate
Nil
Final Income Tax Certficate Nil
Interest Certificate NA
Change of Address Nil
Agreement Copy Nil
No Objection Certificate /
No Due Certificate
Nil