Othello Group homes and properties can be financed through leading financial institutions & banks. Please contact us to get details of approval numbers for our various ongoing projects & any other details at sales@othelloindia.com

How to apply for a Home Loan? (Information Source: Legalpundits International Services Pvt. Ltd.)

Step 1

Approach a Housing Finance Company with the latest salary slip and TDS Form 16 of the last two financial years of yourself and your co-applicant. The loan officer will informally tell you the amount of loan you are eligible for, the areas in which they finance flats and the terms of the same. Collect a loan application form and confirm the needed documents (mainly proof of income).

Visit more than one company since you are likely to get better terms/ larger loan amount if you shop for the best deal.

Step 2

At your chosen HFC, submit the duly filled loan application, along with the requested documents and an application fee (around 1%). They will then interview you on the same. After conducting an appraisal of your application, the HFC will give an in-principle sanction of your loan.

Step 3

You now have to submit your property documents, which should show a clear title. The HFC will check these and levy an administrative fee (around 1%). It will then disburse the loan, either fully or in installments, directly to the builder / seller of the flat.

FAQs

How much housing loan can one get? It depends on a person's repaying capacity which is based on your income.

You can add your spouses' income to increase the amount of loan.

What tax benefits are available in regards to the housing loans?

Tax benefits are available to consumers of house loans for the interest component as well as principal component of the housing loans. The current budget has left the upper limit of the interest payment deduction at Rs 150,000 per annum. The section 88 also allows tax benefits on principal repayments. What is the reducing balance method of interest payment? In reducing balance you reduce the amount of principal payment already paid by you from the initial loan amount. You pay interest only on principal unpaid till that point of time and not the entire loan amount.

Who can apply for a housing loan?

Anyone, including Non Resident 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 loans are sanctioned depending upon your income and repayment capacity. Your spouse's income can be included, if you want to increase the amount of your loan. The maximum loan that can be sanctioned varies with housing finance companies and ranges from Rs. 10 lakh to Rs. 1 crore.

What is an EMI?

Equated Monthly Installment (EMI) is the amount comprising a 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 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.

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

  • Latest salary slip (proof of income for salaried individuals)
  • Photographs
  • Proof of age
  • Identity papers
  • Proof of residence
  • Bank statements for the previous six months
  • For the self-employed: Certified copies of balance sheet, profit and loss statement and tax challans/tax returns for the past three years
  • For partnerships/private limited companies: The Articles of Association, partnership deed and details about the firm

Which sources, other than housing finance companies offer loans?

Banks and insurance companies. You can take a loan against your Provident Fund Account, Fixed Deposits or Post Office Savings, as well as against shares and debentures of listed companies and government bonds and securities.

What is a Home Extension Loan?

A Home Extension Loan is a loan which helps you to meet the expenses of alterations like extension, expansion or modification of your home. You can avail of a Home Extension Loan after obtaining the requisite approvals from the Municipal Corporation.

What is a Home Improvement Loan?

A Home Improvement Loan is one that is made available for you to carry out certain external work like structural repairs and waterproofing or internal work like tiling, flooring, plumbing, electrical work, painting, etc.

How is the rate of interest calculated in India?

Interest rates vary from time to time and from institution to institution. The current trend ranges from about 9% to 11% per annum. The interest is calculated either on a daily or monthly reducing or a yearly reducing balance.

What are the repayment period options?

The repayment period options generally range from five to 20 years.

What are the charges for availing a housing loan?

  • Processing Fees: payable to the lender on applying for a loan. It is either a fixed amount not linked to the loan or could also be a percentage of the loan amount.
  • Commitment Fees: in case the loan is not availed of within a stipulated period of time after it is processed and sanctioned then some institutions levy a commitment fee.
  • Prepayment Penalty: between 1% and 2% of the amount being prepaid is charged by some institutions when a loan is paid back before the end of the agreed duration.
  • Stamp duty and registration fee on a deed of mortgage.
  • Miscellaneous costs such as administrative costs, legal documentation charges, technical consultant charges.

What security is required for a housing loan?

The flat purchased is the primary security and is mortgaged to the lending institution till the entire loan is repaid. Additional security such as life insurance policies, shares, bonds, fixed deposit receipts, national savings certificates can also be offered, as per the requirements of the institution.

Do lending companies require guarantors?

Yes. Many lending companies require one guarantor.

How long does it take for a loan to get disbursed?

Usually loans are disbursed within a week, after the institution has completed the verification process, the documentation (such as taking over of the original agreement for sale/lodging receipt from the borrower) and all other relevant procedures. It can only be done after there is proof that the borrower's own contribution has been paid to the vendor/builder/developer.