Apply for Home Loan

Purpose of Home Loan:

The main purpose of home loan for buyers is to facilitate the purchase of a house or to finance the construction of someone dream home. This is the biggest investment most people will ever make in their life to safeguard their future, and few individuals could afford one without a mortgage. Mortgage loans provided to those individuals who has a good credit histories due to that access to lower interest rates. Thus, make it affordable to own a home within the two or three decades that the loan takes to pay off.

Home loans can also fund home renovations, which are very important for homeowners. Loans for home improvement, are usually a wise investment of money because it add value to a home and other home owners realised when they are thinking of selling it. Home loans can also save borrowers money by allowing them to pay for necessary repairs as needed, rather than waiting to save up money and finding that the damage is worse and the repairs more expensive that they would have been earlier. Home loans are considered to be an important purpose in the global economy. The money that homeowners borrow against home equity also goes into the economy.

Benefits And Features Of Home Loan:

1. Reasonable interest rates. Both floating and fixed options are available.
2. The home loan can be sanctioned from any bank as well as from financing agency before selection of the property.
3. A really smooth simplified documentation process and even faster documentation process for existing customers.
4. You get the freedom of enjoying a longer tenure with lower EMIs.
5. The Balance Transfer feature allows you to transfer your existing home loan to any other bank. This is for you to enjoy long term savings.
6. With the Balance Transfer feature, you can enjoy up to additional top up loan amount. This can be up to 100% of the original home loan.
7. The Banks home loan page provides unique online tools like Eligibility calculator and EMI calculator. Eligibility calculator allows you to find the home loan amount for which you are eligible and the EMI calculator calculates the monthly repayment amount towards the loan.
8. The individuals availing home loan can choose to repayment of loan amount Upto 30 years of loan tenure.
9. Enjoy a fixed interest rate for the for particular years, and thereafter a choice of fixed or floating interest rates.

Documents Required to furnish a Home Loan For Salaried Person:

A home loan applicant must required to furnish following documents in addition to the loan application as listed below:

1 Home loan application form Yes
2 Photograph Yes
3 Identity proof (Any one) Driving License/ job card issued by NREGA/ Adhaar carrd/ Voter ID/ Pan card
4 Income details Latest salary slip/ Form 16
5 Bank statement Last 6 months.
6 Address Proof (Any one) passport/ Driving license/ adhaar card/ voter ID

Documents Required to furnish a Home Loan For Self-Employed Person:

1 Home loan application form Yes
2 Photograph Yes (Partner/ Directores)
3 Signature Proof Yes
4 Addrerss Proof passport/ Driving license/ adhaar card/ voter ID
5 Identity Proof Driving License/ Adhaar carrd/ Voter ID/ Pan card
6 Date Of Birth Certificate of Incorporation
7 Business Continuity Proof Five Years
8 Bank Account Statements Last 6 months
9 Partnership deed Yes ( for partnership)
10 Income Details IT returns and balance sheet and P/L account statement of the last two years
11 MOA/AOA Yes ( for companies )

Characteristics of Home Loan:

It is quite necessary to understand the importance and need of add on amount before borrowing amount from any bank or financial organization for your valuable mortgage. Some of them are outlined below

a. As it is kind of secured loan, interest rates will be lower in comparison of other unsecured loan, like loan for individual or personal loan.
b. In order to secure loan, lender uses property or home while approving amount as per request and eligibility of individual. The main reason behind house as collateral is that its security and as it is secure loan; applicable interest rate will definitely be low. It will be easy for lender to auction off property in case of delay in repayment.
c. Some banks avails the facility of prepayment of repayment amount and some bank do not avails this facility.
d. Home loan is combination of multiple charges like processing fees, registration fees, miscellaneous charges like consultation, documentation, penalty on prepayment, commitment charges and several other charges and fees.
e. In maximum number of cases approval of loan amount rely on factors like income of candidate, area where you are planning to buy property, credit history and several other factors play vital role in entire processing.
f. Generally banks fix the repayment tenure of mortgage loan while applying. In these days tenure can be between 5 to 30 years.
g. It is users responsibility to bore other expenses like registration costs, down payment and others charges, as bank always maintain 20% margin while approving amount. They always approve around 80% of estimated costs.

Applicable Charges And Fees For Home Loan:

# Types of Fees Charges Applicable for Salaried Person Charges Applicable For Self- Employed Person
1 Processing Fees of Home loan 1 % of the loan amount for salaried. 1 % of the loan amount for self- employed.
2 Rate of Interest 8.85% NA
3 EMI bounce Charges Rs. 1000 for every bounce Rs. 2500 for every bounce
4 Secure Fee Rs. 3999 NA
5 Penal Interest 2% per month. 2% per month.
6 Loan statement charges Nil Nil
7 PDC swap charges Nil Nil
8 Interest & principle statement charges Nil Nil

Home Loan Eligibility Criteria For Salaried Person:

1. An individual applying for home loan must be an Indian.
2. The minimum age of individual is 25 years and maximum is 58 years for applying home loan.
3. For salaried, individual must have working experience of 3 years and more.
4. For self-employed, an individual must have 5 years of continuity in the current business.
5. The minimum home loan amount that an individual can avail is Rs. 30 Lakh and maximum is Rs. 10 crore.

Home Loan Eligibility Criteria For Self- Employed Person:

1. An individual applying for home loan must be an Indian.
2. The minimum age of individual is 25 years and maximum is 70 years for applying home loan.
3. For self-employed, an individual must have 5 years of continuity in the current business.
4. The minimum home loan amount that an individual can avail is Rs. 30 Lakh and maximum is Rs. 15 crores.

How To Apply For Home Loan:

Get the home loan in few simple and easy steps.

Step 1: The individual is allowed to fill the personal details such as name, contact no., date of birth etc.
Step 2: The individual is allowed to fill financial details. so , that the individual is allowed to choose the deal which suits their financial requirements.
Step 3: The individual is asked to provide the employment details like in which company he/she is associated with, for self employed, their all business details.
Step 4: Calculate the eligibility for what kind of offers you are eligible for and choose your plan as per your requirement.
Step 5: Give us the details of your new home, including its location and size, and we can help you get the best deal.
Step 6: Pay the fee online through secure pathway. Our Relationship Manager will get in touch with you to help you with the loan process and documents once you have paid the fees.
Step 7: Upload copies of all your documents, including ID, address, signature proof, photographs, employment and income details on the website of your financial agency or the bank.

While Applying for Home Loan, Always Watch out for Points Outlined Below

a. Collection information about available interest rate.
b. Explore maximum platforms to get better options.
c. Collect information about pre closure terms and condition.
d. Check Your Financial Status
e. Check Your CIBIL Score for further processing.
f. Read Fine Prints Carefully.

Main Reasons to opt for Home Loan

a. Conduct Home Repairs in your house.
b. When someone look to buy land or property to construct their dream home.
c. In case of home extension or add up new living area to an existing house.
d. Home Improvement or while renovates your house into dream home.
e. When plan to buy existing building or apartment.

Types of Home Loan

Plot Loan :Plot loans are loan that banks avail to customer to buy plot or land in various locations. It is not necessary that all banks will offer this type of facility.

Home Purchase Loan :Home purchase loan are given to purchase new flat or building. It gives services as its name suggests and it is one of the popular borrowing options popular among needy customers. Almost every bank and financial organization offers facility of this purpose.

Home Renovation/Extension Loan :As with time it becomes necessary to renovate your dream home to give it special looks or if you want to add floor or some room, in that condition this loan is required. Utilization of amount change entire look and decoration of your beautiful house.

Home Loan for Construction :When customer plan to construct home on plot or purchased land and want to construct it in extremely special and beautiful design as per the provision of this loan land must be bought within one year from date of applying. If someone has bought plot more than one year ago, in that condition price of land will be excluded from total loan amount. Initially, it is customer responsibility to submit application along with estimated costs and then respective bank or financial organization team will visit to location to inspect the reality as per request made by customer. After their inspection and their report bank will approve applicable amount as per eligibility of respective individual.

Home Conversion Loan :Customers will be eligible for this type of loan if they already own any house or flat and wanted to buy new one. Interest rates will be almost similar to core home loan. One of the interesting feature of this loan is that current loan amount will be shifted into new house with ease.

Stamp Duty Loan :It will cover entire process of stamp and its applicable charges. It will sustain while purchasing the desired or required property.

Bridged Loans :Only existing homeowner can apply for bridged loan when want to buy new house. It will cover complete funding and other required processing. It is responsibility of person to manage entire processing along with respective lender until previous repay amount is unpaid. As per policy maximum possible tenure of this loan is 24 months.

Home Loan for NRI :This of mortgage loan is available for all NRI (Non-Residential Indian), who want to buy property in India. Entire processing regarding availing this will be completely different from other once.

Balance Transfer Home Loan :To get better interest rate option, generally prefer to balance transfer from one bank to another bank.

Applicable Fees and Charges to Home Loan

On financial product like home loan, bank and RBI charges applicable interest rates. Apart from this, all banks impose different types of charges while processing for customer request. Some of them are outlined below:

Administrative Fees : Highly reputed banks ask for administrative fees, apart from processing fees to complete the processing. Bank charge this fees on behalf of bank administration processing regarding requests. Mostly bank ask for this to complete the back end processing of that particular bank.

Processing Fees : This I one of the common charges that bank asks to process customers request. Different bank charges different amount either on percentage basis or any fixed amount, as per their policy. It may vary bank to bank. Sometimes bank charge least amount or sometimes as offer waived off complete fees to make things easier for all associated customers.

Statement of Account : Initially bank avails one copy of statement without any fees, but if someone has loose the statement then he/she needs to pay applicable fees to get supplementary copy of statement. It is rely on policy of respective bank to charge accordingly.

Pre Payment Charges : These days maximum number have stopped to ask about this charge but there are still few bank that ask for this and add this amount with repayment amount.

Legal Fees : Customer need to pay this amount to lawyer who is helping in entire verification processing of amount approval regarding respective concern. This is applicable as some bank do not have in house lawyer.

Conversion Charges : These days bank avails housing loan facility either in fixed interest rate or in floating interest rate. It depends on customer what he chooses as per his comfort. If customer ever wants to switch from floating to fixed or vice versa, in that time will also impose conversion charge to complete the request of customer. Usually banks decide rate as per their policy and charge accordingly.

Factors that Play Vital Role in Determination of Home Loan Interest Rate

Repo Rate: It refers to the interest rate on which reserve bank of India (RBI) avails amount to all banks as per their requirement. So it is understood that if bank will get amount in lower interest rate then they will impose low interest rate. In short in can be said that lower repo rate will be responsible for lesser interest rate.

Statutory Liquidity Ratio (SLR): In banking terminology, it refers to least amount that all commercial bank needs to maintain as per guideline of reserve bank of India. It is bank responsibility to save or reserve that amount in form of government securities bonds, gold or any other appropriate asset. After crossing the SLR criteria bank will be allowed to credit their customers.

Reverse Repo Rate: RRR or reverse repo rate refers to interest rate on which bank lends amount to RBI. If reverse repo rate is high then bank will be quite happy to lend RBI. If banks will earn benefits through this then they will be able to offer lower interest rate to customers.

Prime Lending Rate (PLR): It is a point that gives reference regarding interest rate that bank uses on their different financial product. Commonly PLR will be 0.5% and it will be integrated on basic interest rate.

Benchmark Prime Lending Rate (BPLR): BPLR point out to interest rate on which all banks lends amount to their customers. As far as BPLR is concern with RBI and according to provision no bank can lend amount to anyone. If benchmark prime lending rates will be high then customer need to pay higher interest rate.

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