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What is a Home Loan?

A growing number of banks and scores of Housing Finance Companies (HFCs) offer home loans to finance the purchase of home properties. Based on your credit score, income, loan amount, LTV ratio, job profile and employer’s profile, the home loan interest rate will start from 6.40% p.a. for tenures of up to 30 years based on the applicant’s credit score alone. The home loan amount can go up to 75% or 90% of the home property’s value depending on credit profile, LTV ratios, and other factors. .
The home loan amount can go up to 75% or 90% of the home property’s value depending on credit profile, LTV ratios, and other factors.

Bajaj Finserv Home Loan
AXIS Bank Home Loan
Tata Capital Home Loan
ICICI Bank Home Loan
Aditya Birla Home Loan
HDFC Bank Home Loans
Standard Chartered Home Loan
Bank of Baroda Home Loan
Aadhar Home Loan
Indian Bank Home loans
Shubham Housing Finance Home Loan

Kinds of Home Loan

1. Home Purchase Loan: The most common type of home loan availed is a home loan for buying ready-to-move-in properties, under-construction properties, and pre-owned homes/resale properties. RBI guidelines state that lenders can offer a loan-to-value (LTV) ratio of up to 75-90% of the property value.

2. Home Construction Loan: With this type of home loan, you can only get the money if you own a plot of land and plan to construct a house on it.

3. Composite Loan: In order to get a home loan, you will need to first purchase a plot of land. This type of mortgage is perfect for individuals who want to invest in or build their house. The first disbursement will be made towards the purchase of the plot, which means that it won’t matter how much money you put down as long as you have enough saved up.

4. Home Renovation/Improvement Loan: This can be used to finance home repairs and renovation expenses of the existing house. The interest rate for this loan is the same as that for a regular home loan, but its tenure is shorter.

5. Bridge Loan: A short-term home loan can be suitable for individuals who wish to purchase a new house with the sale proceeds of the existing home. The loan helps you cover the gap between buying a new house and selling an existing one.

6. Interest Saver Loan: In order to take out a loan, borrowers need to have their bank account linked with their home loan. If you deposited an amount over and above the EMI amount, your prepayment towards the loan will be used in a different way – it will be saved on the interest rate.

7. Step Up Loan: Another type of home loan is where borrowers pay lower interest rates during the initial years, but after that, they receive an increasing EMI. This makes the overall loan affordability for young professionals who have just started their careers!

Fees and other charges are regarded loan

  • Application fee: To cover all the preliminary expenses that lenders incur for conducting the verification, application fees are charged.
  • Processing Fee: It covers the cost of credit appraisal, which is dependent on a borrowers’ credit profile, income, and the home loan scheme. Processing fees are not always levied by all lenders.
  • Administrative fee: The administrative fee levied by lenders is split into two parts- the part charged after the loan sanction, and the part which is known as the administration fee.
  • Repayment Mode Related Charges: When a borrower requests their lenders to change their existing repayment mode during the loan tenure, there is usually a fee associated with it. This fee can range from Rs. 500 to Rs. 1,000 per instance (swap).
  • CERSAI charges: The CERSAI website is a central online security interest registry in India that allows potential lenders to check whether the pledged property is not claimed by some other lender.
  • Legal fee: When a lender engages a firm to scrutinize borrowers’ legal documents, they may charge a legal fee as part of the processing fee.
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Applying for Home Loan Eligibility and Criteria

Basically, the Home Loan eligibility criteria differ from different Banks and NBFCs and these criteria are the same with salaried as well as a self-employed person – only the documentation differ from each other which we will discuss earlier.

  • Income: In the case of a salaried person Income places a role while applying for aHome Loans and the minimum salary should not be less than Rs.25,000/- per month.
    • In the case of a self-employed person, your eligibility is determined by the latest ITR or Income TAX Returns divided by 12 which makes the eligibility criteria.
  • Employment or Business continuation: the minimum employment for a salaried person fully relies on their Income TAX Returns with form 16 and form 26AS and other documentation.
    • In the case of a Self-employed person, the latest 3 years of Income TAX Returns and another financial statement like balance sheet,s, etc. which we will discuss in detail in the documentation part.
  • CIBIL Score: for applying for a home loan, a perfect CIBIL score is required which should not be less than 700. If the applicant’s CIBIL is less than 700 then the applicant must have a VALID REASON for a lower CIBIL.

If the applicant CIBIL gets affected due to COVID Lockdown due to which the applicant has to suffer for job or business which delayed the repayment of loans and the applicant is back with work and the business profit goes up then the bank will disburse the home loan for the certain applicant, rather than this no home loan for CIBIL less than 700.

  • Property Value: the value of the particular property is considered while applying for a Home Loan because Banks and NBFCs give the finances up to 75% to 90% of the total value of the property.
  • Age of Applicant: this matters a lot while applying for a home loan and differ for a salaried and self-employed person as well as for guarantor as well
  • If the applicant Is Self-Employed then the minimum salary can be 21 Years and goes up to the maximum age of 65 Years.
  • In the case of a salaried person, the minimum age decided by the bank is 21 Years and the maximum age should not be more than 60 Years.
  • If the applicant has a guarantor, then the maximum age of the applicant can go up to 80 years as well.

Details Documentation of Home Loan

At first, the documents required for salaried Persons and are.

  • KYC of an applicant consist of the following documents:
    • PAN Card
    • Aadhaar Card
    • Voter ID card of Applicant
    • Driving License of applicant
    • Passport
  • Address proof of an applicant
    • Latest Utility Bill if the applicant is staying in own resident.
    • Proper Rent Agreement if the applicant is staying in Rent.

  • Income Proof of applicant
    • If the applicant is salaried than last 3 Month salary slip or if the salary is to be credited to a bank account then the last 12-month salary bank statement (PDF form)
    • If salary to be credited in salary account, then last 6 Months Banks Statement in PDF form
  • Other Documents
    • The last 2-year form 16 is required by the applicant.
    • Last 2 – Years of Income TAX Returns (ITR)
    • Company ID Card and if the ID card is not available then office Land Line number and official mail ID
    • Appointment letter if any
    • All loans running with sanction letter with a proper repayment schedule

Home Loan documentation for Self–Employed person

Proprietorship Concern

Private Limited Companies

Partnership Firm or LLP

Basic Documents of Main Applicants

·        KYC of Proprietor (Passport Size Photo, Aadhar Card & Pan Card Copy)

·        Latest Utility Bill of Residence if Owned (If Rented then Rent Agreement along with Latest Utility Bill)

KYC of Company (Pan Card of Company+ MOA & AOA & Certificate of Incorporation of Company)

KYC of Partnership Firm/LLP (PAN Card Copy of Firm/LLP +Partnership Deed/LLP Deed of Firm/LLP

Co-Applicant KYC (Not Mandatory at maximum places for Loan

KYC of Co-Applicant (Passport Size Photo, Aadhar Card Copy & Pan Card Copy)

·        KYC of all Directors and Major Shareholder of Company (Passport Size Photo, Aadhar Card & Pan Card Copy)

·        Latest Utility Bill of any of its Director Residence if Owned (If Rented then Rent Agreement along with Latest Utility Bill)

·        KYC of all Partners of Firm/LLP (Passport Size Photo, Aadhar Card & Pan Card Copy)

·        Latest Utility Bill of any of its Partner Residence if Owned (If Rented then Rent Agreement along with Latest Utility Bill)

Business Vintage Documents

·        Copy of GST Registration

·        3-Year-Old Business Vintage Proof (Any Registration or ITR 4)

·        Office Address Proof Latest Utility Bill (If Rented Rent Agreement Required with the latest utility bill

·        Copy of GST Registration

·        3-Year-Old Business Vintage Proof (Any Registration or ITR 4)

·        Office Address Proof Latest Utility Bill (If Rented Rent Agreement Required with the latest utility bill

·        List of Directors and Share Holders on Company Letterhead as of Date

·        Copy of GST Registration

·        3-Year-Old Business Vintage Proof

·        Office Address Proof Latest Utility Bill (If Rented Rent Agreement Required with the latest utility bill

·        List of Partners with Profit Sharing Ration on Letterhead


  • Financial Documents Required for Self Employed Person:
    • Last 3 Years ITR Computation of Income Balance sheet Profit and Loss with complete Schedules of Applicant
    • Last 3 Year ITR along with Computation of Co-Applicant
    • Form 26 As Last 2 years
    • Audit Report + Tax Audit Report last 3 years
    • Last 12 months GSTR3B returns in PDF
  • Banking documents for Home Loan
    • All Current and Limit Accounts Banking Last 12 months in PDF Format of Applicant.
    • Saving Account bank Statement of Applicant & Co-Applicant Last 12 months in PDF format.

Other Documents Required

  • All running loan sanction letter with repayments schedule of applicant and Co-Applicant.
  • If EMI is not on time, then SOA (Statement of Account) is also required.
  • All running loan sanction letter with a repayment schedule of Co-Applicant Other
  • 2 Business reference along with Contact
  • Contact detail of the person who will attend PD along with email address
  • List of Debtors and Creditors on Letterhead of last 2 years and latest if LAP is above 2 Cr
  • Seller KYC

Collateral or Required Property Paper in Home Loan

  • If Property is approved from any authority then a copy of Collateral /Property Paper with complete Chain of last 13 years along with MAP
  • If Property is Leasehold Property leasehold, then PTM (Permission to Mortgage) Letter from the concerned authority is a must. Complete previous chain of last 13 years/ or from when authority allotted the property whichever is later is required
  • If Property title is Freehold and MAP is not approved, then the complete chain of the last 13 years is required.
  • If the Property title is Khasra Khatauni and proper demarcation is available then the complete chain of the last 13 years along with Farhad & Khatauni is required. If Complete demarcation is not available then a Letter from Patwari regarding demarcation is required.
  • If the Property title is Gram Panchayat /Village, then the complete chain of the last 13 years along with Farhad /Khatauni is required. If Complete demarcation is not available then a Letter from Gram Panchayat regarding demarcation is required.
  • If the Property title is LAL Dora, then along with a complete chain of the last 13-year additional documents of the Lal Dora Certificate are required.
  • If Property is acquired through WILL, then the last registry with a complete chain of the last 13 years is required. Additionally, if Will is not registered through Court, then Bank may ask for additional documents.
  • If the property title is GPA, then there is no option for funding with us. If the Property title is GPA & GPA is done on or before 13 October 2011 and the property is subject to the registry then we do have the option. This case also required a complete chain of the last 13 year

Tax Benefits on Home Loans

Home Loan Tax Benefit 2021-22

Section of Income Tax Act

Nature of Home Loan Tax Deduction

Max. Tax Deductible Amt.

Section 24(b)

Interest paid

Rs. 2 lakh

Section 80C

Principal (including stamp duty and registration fee)

Rs. 1.5 lakh

Section 80EE

Additional interest (for first-time homebuyers)

Rs. 50,000

Section 80 EEA

Additional interest (for affordable housing)

Rs. 1.5 lakh

How to Apply

  • Share Your Personal Details
  • View offers: The View Offers section will provide you with a list of eligible home loan offers. You can compare interest rates, processing fees, and the eligible loan amount from the list of offers.
  • Submit the Application: After your application is submitted, you will receive a confirmation of your home loan application.

Steps to Avoid Home Loan Rejection?

1 Credit Score: Maintaining a credit score of 750 or above is an important factor for lenders and banks. They rely on credit scores to check your credibility and repayment history before approving a home loan. So, maintaining a high credit score can help you avoid being rejected for a home loan.

  • There are too many applications for a home loan in a short period of time – When you apply for a home loan from different lenders, it indicates that you are short of credit and need to apply to several sources in order to fill the gap. Lenders believe that this will not be possible due to your past activities or financial status. This leads them to reject your application.
  • Existing loan portfolio: By using a home loan once you have paid off other debts, it might help to reduce your EMI burden. Even if you do not have all the money currently available for a home loan, it is better to apply and get approved as soon as possible in order to avoid being rejected by your lender.

FREQUENTLY ASKED QUESTIONS

Have a question? We've got answers!

A home loan is a loan given to a person by a bank or other financial organization (lender) solely for the purpose of purchasing a residential property. Until the loan is repaid in full, with interest, the lender retains ownership of the property.

Home loans are long-term financial aid with a minimum tenure of 5 years and a maximum tenure of 30 years. The tenure of your personal loan is determined by a number of factors, including the loan amount that the lender has approved for you.

If you already have a home loan and have made timely payments toward it, you might be eligible to borrow a second loan in an amount equal to what you have paid off on your current loan. This is what a top-up loan is known as.

You will be responsible for paying for a few additional fees in addition to the margin. The initial down payment, stamp duty fees, registration fees, and transfer fees are a few of the significant expenses that you have to pay on your own.

A table including information on interest payments and the periodic principal of a loan, as well as the balance due after each payment and the decrease of the loan balance til zero, is called an amortization table.