What is the advantage of a home loan?

• A home loan is a residential mortgage taken by an individual or family who wishes to purchase a piece of real estate in the form of a house, apartment, condominium, villa or a row house.

• Housing loans can also be obtained for building a house, repairing or renovating the interiors of an existing house.

• Home loans are easily available and are categorized into various interest rates (fixed or floating), as per the borrower’s needs and repayment capacity.

Who can apply for a housing loan?

• Anyone, including Non Indians, with a steady source of income.

How much can one borrow?

• Loans are generally disbursed up to a maximum of 85% of the cost of the apartment.

• In most cases, housing loan is sanctioned depending upon the repayment capacity and income of the proposed borrower.

• Spouse’s income can be included, if a person wants to increase his/ her eligibility for the loan.

• The maximum loan that can be sanctioned varies with housing finance companies/ banks and it ranges from Rs. 10 lakh to Rs. 1 crore.

What is an EMI?

• Equated Monthly Installment (EMI) is the amount comprising of portion of the interest and the principal loan amount which is payable by a borrower to the lender every month.

What is a fixed rate housing loan?

• A fixed rate housing loan is a loan where the rate of interest is constant through the entire term of the loan.

What is a floating interest rate housing loan?

• A floating interest rate housing loan is a loan where the interest rate payable is linked to market conditions such as the lender bank’s retail Prime Lending Rate (PLR).

• A floating interest rate fluctuates as the bank rate varies.

• Floating interest rates are generally lower than fixed interest rates.

Do institutions accept joint loan applications?

• Yes

What are the documents required to apply for a housing loan?

• For Salaried Individuals:

  • Latest salary slips (proof of income)

  • Photographs

  • Proof of age

  • Identity papers

  • Proof of residence

  • Bank statements for the previous six months

• For Self-Employed:

  • Certified copies of balance sheet

  • Profit and loss statement

  • Tax challans/ tax returns for the previous 3 years

• For Partnership/Private Limited Companies:

  • The Articles of Association

  • Partnership deed

  • Details about the firm

• For NRIs:

  • Latest salary certificate specifying name (as it appears in the passport), date of joining, passport number, designation, salary and perquisites

  • Photocopy of labor card/identity card

  • Photocopy of valid resident visa stamped on the passport

  • Photocopy of monthly statement of local bank account

  • Other property-related documents

Which sources, other than housing finance companies, offer loans?

• Finance against:

  • Provident Fund Account

  • Fixed Deposits

  • Post Office Savings

  • Shares and Debentures of listed companies

  • Government Bonds and Securities

Is it advisable to obtain a housing loan?

• Taking a home loan seems like a judicious option when the resources on hand may be insufficient to buy a lifetime asset like your dream house.

• A home loan financially helps individuals who cannot pay the entire sum required to purchase their dream house.