Professional Documents
Culture Documents
AN INTRODUCTION
The present study has got all the limitations of case study
method of data collection.
• Chapter Layout :
Chapter Particulars
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A THEORETICAL VIEW-
HOME LOAN
to buy a property in the near future you can even apply for a
loan before you select your property.
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3) Home improvement loan:
Here again, initially many banks did not approve such loans.
However, market forces have now made this a universal feature
of the home loan market. However, care has been taken in
structuring the schemes for avoiding financing for purchase of
land for speculative lation purposes.
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Home loans
for
construction
of new
house / flat
Home
Home equity
extension
loans
loan
SCHEMES
OF HOME
LOAN
Home loan
Home
for purchase
improvement
of housing
loan
site
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Rate of Interest:
1. Cost of funds:
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6. Profit margin
9. Competition:
The lender may have to levy interest at market rates, even if
his cost plus margin is higher than competition.
SECURITY:
1) A simple registered mortgage or equitable mortgage on
the property acquired out of the loan is taken as security. This
is the primary security for the loan.
STEP 1:
Submit an Application form along with relevant documents:
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The finance company will process customer’s application to
check the loan eligibility based on the persons income and
STEP 2:
Verification of the property and supporting documents:
(Usually takes 5-7 working days after Step1)
STEP 3:
Sanction of the loan:
(Usually on the 7th working days after Step 1
STEP 4:
Submission of the original Property documents and signing
the loan
Agreement
(Usually on the 8-10th working days after Step 1)
STEP 5:
Disbursal of the Loan Cheque
(Usually on the 10 –15 working days after Step 1)
The person can draw the loan in parts depending on the stage
of construction of the building. Until such time that the entire
sanctioned amount is NOT drawn, you will pay a simple interest
on the Actual Amount drawn (without any principal repayments).
The EMI payments will commence only after the entire
Sanctioned Loan Amount is drawn.
• Processing Charge:
• Administrative Fee:
• Prepayment Penalties:
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When the borrower pre-pays the loan before the loan tenure,
banks charge a penalty which usually varies between 1 per cent
• Legal Charges:
Banks also incur some charges from the customer for legal and
technical verification of the property.
Banks charge between Rs. 250 and Rs. 500 for every bounced
cheque towards the loan payment because of lack of funds in
your account.
• Credit History:
• Clubbing of income:
Your eligibility to take a home loan will augment when you club
your income with your spouse’s income, bank in this case will
calculate your eligibility on the basis of the clubbed income of
both the applicants. You can club incomes of spouse, children
& parents staying with you and having regular income.
Longer is the loan tenure, lower will be the EMIs which further
increases the repayment capacity of the borrower & in turn
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enhances the loan eligibility.
• Step-up Loan:
Past record:
Recent changes:
According to the new policy changes of the direct tax code bill
introduced in the parliament in the month of august 2010 only
upto Rs 1.5 lakh deduction is allowed on the interest paid on
the housing loan and there is no deduction available on the
principal amount. So if your equated monthly installment is Rs
1.50 lakh, comprising interest and principal outgo of RS 75000
each, you can avail deduction of only the interest.
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CONCLUSION
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unwavering liability is what suits your profile, then fixed interest
rate home loan should be the natural choice. On the other
hand,
if you can handle risks and are willing to go the extra mile to
benefit from any further fall in interest rates, floating rate home
loans will be best suited for you.
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