Frequently Asked Questions (FAQ) for Home Loan in Delhi NCR through LoanMoney

Home Loan Frequently Asked Questions (FAQ) in Delhi NCR

Have a Question regarding Home Loans? Check out Frequently Asked Questions about Home Loans. Find the answers to all your Home Loan queries and Get your clarification right here.

LaonMoney is an Authorized Direct Selling Agents of various National, Multinational and Non Banking Financial Companies for promoting their sales for asset division. Quick Form for Personal Loan in Delhi NCR Click here

Approved plans and clearance certificates along with estimates.

LoanMoney can provide Home Loan from:-

Home Loan from Nationalised Bank: Canara Bank, Allahabad Bank, Andhra Bank, Bank of India, Bank of Maharashtra, Central Bank of India, Dena Bank,IDBI Bank, Jammu and Kashmir Bank, Karnataka Bank, Punjab and Sindh Bank, Syndicate Bank, UCO Bank, Union Bank of India, United Bank of India, Vijiya Bank, State Bank of India, Punjab National Bank and Bank of Baroda.

Home Loan from Private Bank: Bandhan Bank, Corporation Bank, DCB Bank, Federal Bank, IDFC Bank, Indian Bank, Indian Overseas Bank, Oriental Bank of Commerce, South Indian Bank, HDFC Bank, ICICI Bank , Yes Bank, Axis Bank, Kotak Mahindra Bank, Standard Chartered Bank, HSBC Bank, Deutsche Bank, Induslnd Bank and RBL Bank.

Home Loan from Non Banking Financial Company (NBFC): DHFL Home, Indiabulls, Tata Capital, Bajaj Finserv, Capital First, Fullerton India, Aditya Birla Finance, LIC Housing Finance, Magma Fincorp, Reliance Capital and Tata Capital.

LoanMoney will get you an approval in Less Processing Time, Easily Available Loan, Lowers Interest Rates and No Agent or Middleman Charges. Quick Form for Personal Loan in Delhi NCR Click here

Home Loan Frequently Asked Questions (FAQ)

What is an EMI?
EMI (Equated Monthly Instalment) is the amount payable to the lending institution every month, till the loan is paid back in full. It consists of a portion of the interest as well as the principal.

What are the eligibility conditions for a home loan?

To qualify for a home loan , you must be:

  • An Indian resident or NRI
  • Above 21 years of age at the commencement of the loan
  • Below 65 when the loan matures
  • Either salaried or self employed

Who can be a co-applicant?
A co-applicant is/are the co-owners of the property which is being offered as collateral/security to the loan. However all co-applicants need not be co-owners. Co-applicants to the loan are generally husband/wife, father/son, etc.

What are the interest rates offered for home loans? What are daily reducing, monthly reducing and yearly reducing balance?
Interest rate varies according to the market conditions and interest rates are dynamic in nature. The interest on home loans in India is usually calculated either on monthly reducing or yearly reducing balance. In some cases, daily reducing basis is also adopted. Quick Form for Personal Loan in Delhi NCR Click here

  • Annual Reducing: In this system, the principal, for which you pay interest, reduces at the end of the year. Thus you continue to pay interest on a certain portion of the principal which you have actually paid back to the lender. This means EMI for the monthly reducing system is effectively less than the annual reducing system.
  • Monthly Reducing: In this system, the principal, for which you pay interest, reduces every month as you pay your EMI.
  • Daily Reducing: In this system, the principal, for which you pay interest, reduces from the day you pay your EMI. EMI in the daily reducing system is less than the monthly reducing system

What is a fixed rate of interest?
Fixed rate of interest means the rate of interest remains unchanged for the entire duration of the loan. This means you do not benefit even if home loan interest rates drop in the market during the course of your loan.

What is a floating rate of interest?
In this case, the rate of interest fluctuates based on the market lending rate. This means you stand the risk of paying more than you budgeted for in case the lending rate goes up

What is Pre-EMI Interest?
Prior to full and final disbursement and commencement of EMI, you pay pre-emi interest on the portion of the loan disbursed to you. Pre-EMI interest is payable every month from the date of each disbursement up to the date of commencement of the EMI.

What are the other costs that usually accompany a home loan?

Home loans are usually accompanied by the following costs:

  • Pre-payment Penalties: If the Housing loan is under Variable/Floating Rate loan and the loan is repaid through any source, no prepayment charges shall apply If the Housing loan is under fixed rate, the prepayment charges shall apply except in the cases in which the customer is paying out of his ‘Own Sources’.
  • The expression ‘own sources’ indicates that the proceeds of the prepayment should be from ‘any source other than from a bank/HFC/NBFC and/ or a financial institution’.

All other Loans would continue to attract prepayment penalty upon pre-closure, as per the terms and conditions of the loan agreement which is duly signed and executed by the customer. Quick Form for Personal Loan in Delhi NCR Click here

When can I apply for a Home Loan?
You can for apply for Home Loan at anytime.You may apply for it after you have decided to acquire/construct a property, and even in case, the property has not been selected or the construction has not commenced, you can still apply. What's more, you can also avail for Home Loan facility if you want to renovate or expand your home.

How do I make an application?
You need to submit the application form along with the necessary documents. The bank, after going through your application will review it, ask questions wherever necessary and will also informally tell you the loan amount you are eligible for and the terms and conditions of the same and put across its decision to you. You are as always, advised to shop around for more than one bank so as to get better terms/larger loan amount/lowest interest etc.

How is my Home Loan eligibility determined?

Home Loan eligibility is determined by your repayment capacity, taking into consideration, factors such as: Your:

  • Income
  • Qualifications
  • Age
  • Spouse's income
  • No. of dependants
  • Stability and continuity of occupation
  • Assets/Liabilities.
  • Savings history.

The most important concern of banks in determining your loan eligibility is that whether or not you are contentedly able to pay off the amount you borrow.

What are the types of home loans available?

These are a range of Home Loans available:

  • Home Purchase Loans: for the purchase of a new home.
  • Home Improvement Loans: for implementing repair works/renovations in a home that you have already purchased.
  • Home Construction Loans : for the construction of a new home.
  • Home Extension Loans: for expanding/extending an existing home.
  • Land Purchase Loans: for purchase of land for home construction/investment purposes.
  • Home Conversion Loans: for those who have financed the present home with a home loan and wishes to purchase/move to another home for which some extra finances are required. In Home Conversion Loan, the existing loan is transferred to the new home including the extra amount required, eliminating the need for pre-payment of the previous loan.
  • Balance Transfer Loans: helps you to pay-off an existing home loan and avail the option of a loan with a lower rate of interest.
  • Bridge Loans: for people who wish to sell the existing home and purchase another. This loan helps you finance the new home, until you find a buyer for your old home.
  • Refinance Loans: helps you pay off the debt you have incurred from private sources like relatives/friends, for the purchase of your present home.
  • Stamp Duty Loans: is sanctioned to pay the stamp duty amount that needs to be paid on the purchase of property.
  • Loans to NRIs: to build/buy a home in India. EMI is payable till the loan is paid back in full. It consists of a portion of the interest as well as the principal. Quick Form for Personal Loan in Delhi NCR Click here

Some of the incentives offered by banks are :

  • Loan sanction without requiring you to identify property as a prerequisite for eligibility.
  • Free accident/property insurance.
  • Waiving of pre-payment penalty/processing fee.

How long does it take to get my application processed and the loan sanctioned?

It takes around two weeks for processing of one's application if all the necessary documents are in order and takes another week for the bank to inspect the property papers and make the disbursement.

What is the maximum amount I can borrow?

The maximum amount that you can borrow depends on factors such as:

  • The purpose of the loan.
  • Whether it is for purchase of property or improvement or renovation.
  • Or purchase of land for development etc.
  • Besides, your residential status (whether resident Indian or Non-Resident Indian) will also be significant on the maximum quantum of loan that you can borrow. Typically Home Loans are provided for in the range of 75%-85% of the cost of the property, including cost of land.

What security/collateral do I have to provide?
Banks usually take some additional securities which are called collateral securities. Collateral could be in the form of guarantee from one or two persons, assignment of life insurance policies, the surrender value of which should be equal to the loan amount, deposit of shares, and units or other securities. These additional securities are taken just incase a loan is not paid back; recourse may be taken to such securities instead of depending upon the mortgage of the property which is the last resort .

Does the property have to be insured?
Yes, and you will have to insure that the property for fire and other appropriate hazards, as required by the banks during the loan tenure. The banks will be the beneficiary of the insurance policy . You will also have to produce proof/evidence, whenever required by the banks. This is an added cost that will add to the final cost of purchase of the property.

Can I take a Home Loan for construction in one city while working in another city?

Yes, you can take loan for construction in one city while working in another. The banks usually service this loan after getting details of the plot legally verified. Quick Form for Personal Loan in Delhi NCR Click here

What is the range of interest rates offered?
The home loan interest rate varies from banks to banks and normally ranges from 12.5% to 16%.

How is the interest rates calculated on my loan?
Most banks follow the yearly reducing-balance method, which accounts for your principal repayments only at the end of their financial year. As a result, you pay interest on the principal that you have already returned to the bank. The effective interest rate is therefore higher than the quoted interest rate by around 0.7%. Some banks may also follow the daily or monthly reducing-balance method, which results in a lower interest burden.

What are the bases of interest rates calculation?
The interest on Home Loans is usually calculated on Monthly Reducing or Yearly Reducing balance. In Monthly Reducing Balance, the principle on which you pay interest reduces every month as you pay your EMI. However in Yearly Reducing Balance, the principal is reduced at the end of the year, therefore you continue to pay interest on a certain part of the principal which you have actually paid back to the bank, which basically means the EMI for the Monthly Reducing system is effectively lesser than the Yearly Reducing system of calculating the interest.

What is the Fixed Rate of Interest?
Fixed Rate of Interest means that the interest rates remain FIXED for the entire duration the loan. This basically means that you do not benefit, even if the rates of interest drop in the market.

What is Floating Rate of Interest?
This is the rate of interest that fluctuates according to the market lending rate.

What are the repayment period options?
The maximum period over which one can pay the loan varies for every bank, and is also different for every scheme. Also your residential status makes a difference. If you are a resident Indian, you could avail of a loan for duration of 5-20 years. Few banks offer a 20-year repayment period, generally at a higher interest rate. As a Non-Resident Indian, you can only avail of a loan for a maximum period of 7 years.

Can I repay my loan ahead of schedule?
Yes, you can pay your loan ahead of schedule, if you want to. However, it must be noted that banks charge a fee for early redemption of loan. This fee can vary between 1-2% of the loan amount being prepaid. Quick Form for Personal Loan in Delhi NCR Click here

Who can be a Co-Applicant?
A Co-Applicant(s) is/are the Co-Owners of the property in respect of whom the financial assistance has been sought. However all co-applicants need not be co-owners. Usually co-applicants are: husband/wife, father/son, mother/daughter etc.

What are the fees and charges payable and when are they payable?
Banks charge fees at the time of application (processing fee) and at the time of loan sanction (administrative fees). The processing fee is either a fixed amount not linked to the loan or it may be a percentage of the loan amount. The loan amount received by you can be less than the processing fee. And as for the administrative fee, 1% of the loan amount sanctioned will have to be paid. Both the processing fees and administration fees are payable upfront.

Home Loans may also be accompanied by the following extra costs:

  • Interest Tax: is the tax payable on the interest paid on a home loan and not the principal. This tax is sometimes included in the interest rate of the loan, or may be charged separately as interest tax.
  • Commitment Fees: Some banks levy a commitment fee in case the loan is not availed of within a stipulated period of time after it is processed and sanctioned.
  • Miscellaneous costs: It is somewhat possible that some banks may levy a documentation or consultant charges.

What is the EMI?

EMI or Equated Monthly Installments refers to the fixed sum of money that you will be paying to the bank every month. The EMI comprise of both interest and principal repayment. The amount of the EMI depends on the quantum of loan, interest rate applicable and the term of the loan.

In how many installments can the loan be disbursed?

The loan can be disbursed in full or in suitable installments (normally not exceeding 3 months) taking into account the requirement of funds and progress of construction, as assessed by the bank. Quick Form for Personal Loan in Delhi NCR Click here

Do I get a tax benefit on Home Loan?
Yes, you are eligible for tax benefits on the principal and interest components of the loan under the Income Tax Act, 1961. However as the benefits could vary each year, do check out the current benefits available.

Does the agreement for sale have to be registered?
Yes, and you are advised to do so too as the Agreement for Sale between the builder and the purchaser is required by law to be registered. You can register at the office of the Sub-registrar appointed by the State Government under the Indian Registration Act, 1908.

I have applied for a loan of Rs.35 lakh along with my brother who is the Co-owner and co-borrower for the purchase of a new constructed house. I am paying the EMIs from my bank account.

Can we both claim IT benefit under this situation and if so how?
You both can claim the deduction for the home loan repayments in the ratio of your respective shares in the laon.Tax deduction benefits will be available for each of you separately under section 24 (interest payable on the loan) limited to Rs.1.50 lakh for each of you if the property is self-occupied and under section 80C, limited to the extent of Rs.1 lakh for each of you (for the principal repaid) in the proportion of your share in the loan.

The deduction can be claimed by both if both are paying the EMI.in case only you are paying the EMI, you should recover your brother’s share from him, it is advisable to enter into an agreement or memorandum of understanding specifying the share in the loan and share in the property.

Currently my husband and me have a joint home loan for Rs.7.75 lakh. our EMI works out to be Rs.8000 per month. I’m looking for a second home loan under my name. Does Indian banking law allows a person to have two home loans under their name? Please advice.

Under the provision of the Income Tax Act as well under banking laws, there is no restriction as to how many properties you can take a housing loan for or on the number of properties a person can own. The loan on the second property will be available provided your income is sufficient to justify repayment of both loans. The tax treatment is also different where you own more than one property.

Can a bank help me get 100% loan for the home? Or some option because I can't pay even 20% of the cost of the home.?
bank can finance only up to 80% of the property cost. The amount of loan will also depend on your annual income. if you are less than 40 years of age you should be eligible for around 4-4.5 times of your gross annual income as loan if you have no other loan to service for the margin money, you can use the balance from your saving or proceeds of the investment sold, In case arranging the funds for down payment is still difficult, you can look at withdrawing from your employee provident fund (if eligible) or look for friendly loan from your family member/friends.

Else,you can look for secured loan against tangible movable security such as jewelry, NSC, bonds, shares, units of mutual fund, or life insurance policy with high surrender value. As a last resort, you could look at an unsecured personal loan. Quick Form for Personal Loan in Delhi NCR Click here

What is the process to resell a flat? I have bought an under-construction flat and have taken a home loan from a leading lender?
Yes, you can sell the apartment, but you will need the lender’s consent. This consent letter will provide the amount, on payment of which the outstanding loan liability will stand discharged. This amount included the prepayment charge, if any, chargeable by your lender and should list the documents held by them.

This amount mentioned is calculated as on a future date, to enable time for you to arrange the payment from the buyer. After the payment of all dues, the lender will return your original documents and issue a loan closure letter. Please make sure you get the no-dues certificate to obviate any issues in the future. The buyer can make payment of the balance on receipt of the original documents from the bank. Since the flat is under construction you also require a NOC from the builder. Quick Form for Personal Loan in Delhi NCR Click here

What are the documents required at the time of application?
Each bank has its own list of documents that one must submit at the time of application. The common documents that the banks require at the pre-approval stage are:

  • Passport size photograph.
  • Proof of Age.
  • Copy of Bank A/C statements for the last 6 months.
  • Copy of latest credit card statement.
  • Signature verification from your banker.

If you are self-employed you require :

  • Your business track record .
  • Copy of audited financial statements for the last 2 years.

If you are salaried, you need :

  • Salary and TDS certificate
  • Latest pay slip.
  • Letter from employer.

And at the disbursal stage (for property already located), you need to submit the following :

  • Allotment letters.
  • Photocopies of title deeds.
  • Encumbrance certificate.
  • Agreement to sell .

For self-construction:

Know more about Home Loan

Home Loan

A sum of money borrowed from a financial institution or bank and NBFCs to purchase a house. Home loans consist of an adjustable or fixed interest rate and payment terms. 

Home Loan is a Secured loan offered against the security of a house/property which is funded by the bank’s and NBFCs the property could be a personal property or a commercial one. The Home 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.  Read more...

Apply Home Loan

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Home Loan interest Rates

Home Loan Interest Rates is one of the first parameters that one considers along with other value adds like pre-closure options, part payments etc. Interest rates are the rate at which the bank is willing to lend money to you which in turn is their source of income. Read more...

Home Loan Process

If you are a first time home buyer looking for Home Loan, here is the step by step guide to the process of obtaining a home loan. Start Home Loan Process follow these simple steps. Read more...

Home Loan Documentation

The Home Loan Documentation process varies from individual to individual. The requirements are based on your profession, income and loan requirement. Read more...

Why choose LoanMoney for taking Home Loan in Delhi NCR

  • Easily Available: - Home Loan are offered at reasonable interest rates and it is easy and convenient to get Home Loan from in comparison to Home Loan from other Banks or NBFCs. Quick Form for Personal Loan in Delhi NCR Click here
  • No Agent or Middleman Charges: - In order to get Home Loan, you do not have to pay any agent or middleman charges. LoanMoney as your Loan Agency help you avoid unnecessary delays and expenses. You can directly approach the LoanMoney for Home Loan for the immediate financial need.
  • Unsecured Loan: - Home Loan is an unsecured loan. There is no collateral security required in order to get this Home Loan. All that is required is your ability to pay back the money. You are not required to mortgage any of your assets or provide for any kind of guarantee.
  • Less Processing Time: - LoanMoney guarantees that the processing time involved in getting  Home Loan is very less.
  • Minimum Paperwork: - LoanMoney ensures that getting a Home Loan does not require verification of any asset or any other kind of proofs and certificates that involve a lot of paperwork.
  • Schemes and Offers: - LoanMoney keeps you updated with special schemes and offers of  Home Loan for professionals like Chartered Accountants, Doctors and Architects etc. Quick Form for Personal Loan in Delhi NCR Click here

LoanMoney will get you an approval in quickest possible time. All you need to do is visit LoanMoney.in and fill an enquiry form. You can also drop a mail to info@LoanMoney.in or call to +91-8130 222 111. A LoanMoney representative will get in touch with you and collect your documents from your doorstep.

 
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