Generally you take a loan for buying (house / flat,) plot or construction / renovation. Many times the loan house is also taken to raise or repair. Here we are giving you all the necessary information about home loan.. So Please Read the Post...
How much loan can you take Now:-
Before starting the loan process, evaluate how much you earn and how much money the bank can offer.. So Very Important
The ability to take your loan depends on the capability to repay it. It depends on issues related to your Every monthly earnings, expenses and earnings of the family, property, liability, and income stabilization.
Bank first see whether you will be able to repay the loan on time or not. The more money you get each month, the amount of your loan will increase.
Generally a bank or a lender looks at whether you will be able to pay up to 50 percent of monthly income as a loan installment or not.
Loan amount depends on the loan period and the interest rate also. Apart from this, the bank also fixes the upper limit of the loan for the loan.
अगर आप जल्द होम लोन चुकाना चाहते हैं तो आपके बहुत काम आएंगे ये टिप्स... How much more loan can you take:-
10 -20% of the price of a home or flat has to be made down payment. This is your own contribution.
After that, the value of the property is 80-90% of the loan. It also includes charges like registration, transfer and stamp duty.
Even if the lending institution approves you a lot of money, it is not necessary that you take all the money in the form of a loan.
When buying a property, you should pay as much as the down payment, so that the loan burden is minimal. Keep in mind that the bank loan on home loan charges a lot from you in the long-term.
Does Home Loans require an application:-
Yes, in most cases co-applicant is necessary. If the property is in the name of two loans, in that case both of them must be included in the home loan. If you are a property owner then any person in your family can be an applicant.
What documents are required for loan application:-
There is a checklist of documents to be put in the loan application form itself. With this you have to put a photo.
From the statutory documents of buying a home, the bank has to give you the salary slip along with identity and residence proof (attested by the office) and form 16 or income tax return with the bank's last six-month statement.
Some lenders offer life insurance policies, share papers, NSCs, mutual fund units, bank deposits or other investment papers as a mortgage.
Loan approval and release:-
According to the paper given by you, the bank decides to give you a loan or not. The loan amount depends on the same.
If the bank accepts your application and decides to give a loan accordingly, then there is information about the loan amount, duration and interest rates etc. in the summary letter. There is information about the condition of the loan.
When you actually have money in your hand, it is called disbursement. This actually happens after the completion of the technical, legal and valuation process.
You can decide to take less loan from the sum that is in the letter. You have to give allotment letter, title deed photocopy, cell agreement and incumber certificate to find a loan.
It is interest from the day on which the loan amount came in your hand..
How will the amount of loan come in your hands:-
The loan is given to you in lump sum or installment. There can be more than three installments in this. In the case of construction property inside, the loan amount is given according to the progress of the construction.
In case of this type of property, you can make this agreement from the lending bank where the amount of loan will be given to the builder according to the construction.
In case of a ready-to-point property, the loan amount can be lump-sum.
What are the options for interest rates:-
Interest rates on home loans can be fixed or flexible. Fixed rate of interest is fixed in advance and this varies in Flexible.
What are the Marginal Cost of Funds Based Lending Rate (MCLR):-
It is a new method developed by banks to decide on interest rates on loans. Earlier, the banks used to determine the interest rates based on the base rate. Now it is available only at the rates based on MCLR.
In MCLR mode the bank decides the MCLR rate every month for one day, one month, three months or six months, one year, three years. After this, the bank places the interest component by adding the spread component.
For instance, if a bank's MCLR rate is 8 percent for one year and its spread is 0.5 percent, then in reality, the interest rate on the loan will be 8.5 percent.
In case of MCLR based interest rates the bank can reset it in one year.
The quarterly, half-yearly reset option is better in this period of decreasing interest rates, on which your bank is ready. If interest rates begin to rise, then in this case you can get a loss.
What is the base rate and what to do if your home loan is linked to it:-
All home loans borrowed after one July 2010 (but before 1st April 2016) are linked to the base rate. In this case banks have the freedom to calculate cost of funds according to average fund cost or according to MCLR.
What are the costs involved in home loan:-
When you take home loan, you do not pay the loan only. Although this does not apply in every case, but it involves many expenses.
The loan amount can be up to one percent processing charge, which many times the bank pays. In the case of more expensive properties, two valuations are done and loan is done at lower valuation.
The lending bank is called the Technical Evaluation Fee. The lending bank employs the other firm to check the papers of the person taking the loan. It also costs involved in the processing fee, some charge it separately.
What is monthly installment:-
Every month you pay the amount to the bank, there is both interest and principal, it is called Equal Monthly Institution or EMI.
How can loan repay:-
There are several ways to repay the loan to the bank. The outstanding amount of the loan can be paid to the bank by electronic clearance system (ECS, ECS), you can ask your employer to deduct this amount from salary and repay the bank directly or post datedaid check from the salary account.
How does the loan amount change:-
Every month the installment you pay, there is also the principal with interest. This principal is deducted from your actual principal. In fact, every month your amount of interest decreases and principal increases. Most banks adopt monthly remuneration balance based approaches.
Can you stop the loan before time:-
You can stop it for the period you have taken for it. If you are in floating interest rate, then no charge is taken for this, while banks can charge a fixed rate.
What is the Pre-Paid Part of Home Loan:-
In addition to the regular installment, when you deposit some amount in a loan account, it is a partial payment. This reduces your principal amount, which reduces the component of interest in your installment amount.
This can reduce the duration of your loan, and in reality you save the amount to be paid in the form of interest.
Do you issue bank documents for the installments paid each year:-
Every year the bank sends you a document like this. This statement helps you to know about the loan. Many banks also allow it to be downloaded online.
Should you take insurance for a home loan:-
It is always better that you cover the risk of this loan. In your absence this can be a great relief for your family.
You can take a pure term plan for this or you can take a mortgage insurance plan. There are both single and regular premium options in this type of plan.
