What is an EMI?
EMI refers to the ‘Equated Monthly Installment’ which is the amount the client will pay to us on a specific date each month till the loan is repaid in full. The EMI comprises of the principal and interest components which are structured in a way that in the initial years of the loan, the interest component is much larger than the principal component, while towards the latter half of the loan, the principal component is much larger.
What are the parameters to check for eligibility for a Home loan?
The Eligibility is largely determined by the income level and repayment capacity. Other important factors include the age, qualification, number of dependents, spouse's income (if any), assets & liabilities, savings history, and the stability & continuity of occupation.
When can I make a home loan application?
You can apply for a Home Loan at any time once you have decided to purchase or construct a property, even if you have not selected the property or the construction has not commenced.
What does the Market Value of the property mean?
Market value refers to the estimated amount that is expected to be fetched on the property as per the prevailing market conditions.
Do I get Tax benefits on my loan?
Yes. One can avail of tax benefits on the principal and interest components of your Home Loan under the Income Tax Act, of 1961.
When do I start repaying the principal amount?
Repayment of the principal commences from the month following the month in which full disbursement of the loan starts. Pending final disbursement, you pay interest on the portion of the loan disbursed. This interest is called pre-EMI interest. Pre-EMI interest is payable every month from the date of each disbursement up to the date of commencement of EMI.
Any amount over and above the interest which is paid by you goes towards principal repayment, thus helping you repay the loan faster. This is especially useful in case your disbursements are likely to be spread over a longer period of time.
In how many installments loan can be disbursed?
Once the provider receives the request for disbursement, the loan will be disbursed in full or in installments, which usually do not exceed three in number. In case of an under-construction property, disbursement of the loan will be in installments based on the progress of construction, as assessed by the provider.
Does the property have to be insured?
Yes, the property has to be duly insured for fire and other appropriate hazards during the pendency of the loan.
Can my spouse be my co-applicant in a home loan?
Yes, you can add your spouse as a co-applicant to your home loan. Your spouse's income can also be considered for ascertaining your home loan eligibility subject to the availability of income documents as required.
What is PMAY Scheme? How can it benefit loan takers?
The Pradhan Mantri Awas Yojana (PMAY) (URBAN)-Housing for All was a mission that was launched by the Government of India with the aim of boosting home ownership. The PMAY scheme caters to the Economical Weaker Section (EWS)/Lower Income Group(LIG) and Middle-Income Groups (MIG) of the society, given the projected growth of urbanization & the consequent housing demands in India.
Benefits:
Credit Linked Subsidy Scheme (CLSS) under PMAY makes home finance affordable as the subsidy provided on the interest component reduces the outflow of the customer on the home loan. The subsidy amount under the scheme largely depends on the category of income that a customer belongs to and the size of the property unit being financed.
What is the maximum repayment tenure allowed for home loans?
The maximum repayment tenure depends on the type of housing loans you are availing, your profile, age, maturity of the loan, etc. For home loans and balance transfer loans, the maximum tenure is 30 years or till the age of retirement, whichever is lower.
Who can be a co-applicant for a home loan?
All co-owners of the property need to be co-applicants to the house loan. Generally, co-applicants are close family members.
Will the interest rate change during the tenure?
The home loan interest rate depends on the type of loan. There are two types of loans:
Adjustable Rate or Floating Rate: In an adjustable or floating rate loan, the interest rate on your loan is linked to your lender’s benchmark rate. Any movement in the benchmark rate will effectuate a proportionate change in your applicable interest rate. The interest rates are reset at defined intervals. The reset can be according to the financial calendar, or it can be unique to each customer, depending on the first date of disbursement. The provider may at its sole discretion, at any point during the subsistence of the loan agreement, alter the interest rate reset cycle on a prospective basis.
Combination Loans: A combination loan is part fixed and part floating. Post the fixed rate tenure, the loan switches to an adjustable rate.
What are the documents required for processing loan?
KYC documents (identity and address proof)
Proof of income (P&L statement)
Proof of business existence. and
Account statements for the last 6 months
What is the eligibility criteria and documents required for a home loan?
Anyone can apply for our home loan as long as they meet the criteria mentioned below.
Eligibility criteria
Nationality: You must be an Indian citizen residing in India.
Age: A self-employed applicant must be between 25 years to 70 years. The upper age limit is considered as the age at the time of loan maturity.
CIBIL Score: A CIBIL Score of 750 or higher is ideal to get a Home Loan.
Employment status: As a self-employed applicant. you should have a business continuity of over 5 years in the current business.
Note: This is an indicative list that may change based on the actual loan application.
What is the maximum loan limit one can get?
If the eligibility criteria is met, a maximum of 15 Cr can be granted as a loan depending upon essential factors like age, income profile, and CIBIL score, amongst others.
Are Self-employed professionals eligible for a home loan?
Self-employed professionals are eligible for home loan, must be a resident Indian citizen between 25-70 years of age, in addition, should have a business continuity of 5+ years in the current business to be eligible for a home loan.