Home Loan is an important source of finance lend by the bank to purchase new home or resale home. For resale homes age should not be greater than 15 years because banks or any finance institution does not lend loan for 15 years+ apartment. So it is better to go for housing loan for new apartments only.
Getting a home either for basic living or want to move for living lavish luxurious stay with the help of borrowed money is termed as Home loan. This loan is majorly borrowed from bank at calculative interest rate. When you want to buy a property and you do not have complete amount to pay in that case you go for loan where money work out is carried out between loan seeker(you) and loan lender(bank) helps in bringing your first-time property or dream property into reality. Once the loan borrower pays back the loan amount in full with interest, the ownership of that property is fully then transferred into the loan payer's name.
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91estate is right source to find your right housing finance, we are authorised channel partners with many banks and private finance institutions so we will offer complete transparency and right suitable finance provider. Before we offer any finance institutions we understand your loan requirement, your basic income and expenses depending on everything we analyse and we do some research to find right finance provider to you so that it will become hassle free documentation and approve your loan quickly with best % interest rate.
We take care everything from your documentation to process your loan you just need to provide following documents as needed then our team will give best options with good interest rate as it suits.
If you want to know more on home loan or apply for home loan or any query regarding loan please read below the following details it will really open up home loan and its process.
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There is eligibility requirement to get loan on property which needs to be fulfilled mandatorily. Below are the following points on the same: -
He/She should be not minor should have proper PAN card holder. He/She should be salaried working or self-employed. Less the age towards retirement more the loan amount would be sanctioned.
You should not be listed in the defaulters list of SEBI. Your credit score should be pretty good in order to avail maximum percent of loan. Please note maximum availability of loan is 85% of the asset value rest 15% need to be paid as down payment. Maximum numbers of years of loan offered by bank is for 30 years.
One of the factors which decide credibility of loan seeker as we discussed above is age while other various factors are qualifications(more the professional better and fast loan), employment, years of work experience, dependents in family, previous track recorded at SEBI via PAN card of repaying past loans you may have taken, etc.
You will also need to provide a variety of personal like salary slip, copy of income tax returns etc. and property documents include original sale agreement, original receipts of payment made by the property to the builder and other legal documents. One more important factor – age of the property which is marked if the construction is newly build or under construction property has more loan offer with interesting schemes as compared to property built a decade longer.
There are two types of interest rate available on the property loan
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Fixed Rate: The interest rate is constant either for the entire tenure or period of the loan or till certain part of the tenure of the loan. If you are opting for fully fixed rate loan, the EMI remains constant for the entire period irrespective of condition whether the bank increases or reduces its interest rates and irrespective of RBI mandated changes in interest rates. If rate of interest shoots high over the years, a fixed rate of EMI becomes very light for pocket as you will pay far lower rate of interest than the market. While reduced market interest rates will have the adverse effect.
Floating or reducing Rate: As the name suggests, the floating or reducing rate of interest has variation with respect to market conditions. EMI of a floating rate loan changes with RBI mandated changes in interest rates and with changes in bank's internal interest rate from time to time. If market interest rates show rise, your EMI will increases and consequently when interest rates goes down, your EMI also fall.
If you have bought a home loan then it's repayment with certain decided amount is done month wise which is usually referred as EMI which is full-form of Equated Monthly Installment. So knowing how the loan amount repayment is decided as EMI what all the factors it includes we have a quick sneak-peak into it. The EMI calculation for property loans works on the following inputs:
Loan or Principal Amount: The sum of money you borrow for buying out property is the loan amount. The loan amount depends upon the cost of the property as well as the money repaying capacity of the loan seeker. (Note that bank or financial institution can only give 80% or maximum 85%(in case of extreme well loan profile of the seeker) of the property value as loan.) This is termed as principal amount of the loan and the rate of interest is applied on it as per loan provider. The final amount post calculating of interest rate is then divided equally through the tenure or periods of the loan. Usually EMI or monthly installments is not set more than 40% of your monthly income.
Interest Rate: This is the rate at which interest is calculated and applied on the loan amount given. Please note that loan percentage rates vary from one financial provider to another, so hunt around for the best interest rates providing institution before applying for a home loan. Interest rate can be either fixed or floating: -
(a) : In fixed kind of case interest rate remains unchanged for the entire loan tenure and all loan EMIs are equal.
(b) Whereas in the case of floating interest rate it will get fluctuate with any change in the basic rate causing variation in EMI.
Tenure or Periods: It is the time given to or chosen by you for doing repayment of the loan. Most of the loans come with flexible loan tenures. Property loans are long term loans with long repayment tenure of up to 20 years, in some cases even continuing for 30 years. You can choose loan tenure as per your choice, but remember the longer tenure you choose the more interest you will have to pay. However, it is best to take a loan for the shortest tenure which can be easily afforded. If you wish for long-term loan then get ready to pay high interest rate. In general calculation a 10 years (120 months) loan will cost to pay interest rate of 57% of the loan amount. While the tempting long-term loan will rise up to 128% if the tenure selection is of 20 years(240 months). In order to calculate the loan EMI the following is the general arithmetic formula applied:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
In above formula, following are the understanding of letters used: for more information check our home loan calculator
| EMI | Equated Monthly Installment |
| P | principal or the loan amount that is taken as a loan |
| R | rate of interest that is applied on the loan amount keep the interest rate as monthly rate |
| N | tenure or period of repaying of the loan or the number of monthly installments that you will pay (again remember to put periods in months) |
Sometimes it is not easy to calculate EMI applicable on your home loan using Excel or by hand, as it is a complicated one. Hence suggesting the best is to use tool of loan EMI calculator for the same reliable and plenty many tools available online. Using loan calculator tool you can calculate the EMI within seconds and save your energy and spending time in doing tedious calculations.
Amount taken in the form of loan from banks or any financial institution for any desired property is paid usually in month installment forms better referred as EMI in layman terms. Loans can be repaid either through a deduction against salary(if you are salaried person) it is the latest methodology and termed as ECS(Electronic Clearing Service) with this money are automatically debited to your account every month to pay or a certain bill or fee. It helps so you don't have to remember every month to pay your regular bills, post-dated cheques often termed as PDC it is most widely used and very convenient, cash or demand draft it is very rarely used method.
There are many fees and charges depending upon the bank(govt. or private bank) that add to your pocket effectively when bought home loan. Below are the various charges and fees: -
1. Administrative fee: This fee is majorly applied by all banks and it is certain percentage of the loan amount sanctioned. You have to pay this fee when you accept the loan offer letter from the loan lender(bank or financial institution).
2. Processing fees: This fee cover costs incurred in processing your loan application. If you are lucky chap this cost may be waived off when certain scheme is running during specific period. If not then you will need to pay this when you submit loan application form. It is approximately around (1%)one percent of the loan amount. Some financial institution may charge a flat fee instead.
3. Technical charges: When a technical person visits site this is charge gets applied in order to meet that expense.
4. Legal charges: Every bank or financial institutions have their legal department. For getting your property documents looked-up by their lawyers those are termed as legal charges which are to be paid.
5. Stamp duty and registration charges: These are the government charges applied when property is bought. These are the mandatory charges which is important and cannot be skipped (need to be paid) equivalent as important as price of the property paid to the builder. Earlier in Mumbai Stamp duty is 5% of the cost of property + Service Tax(4.5%) + VAT(1%) + 30000 INR registration charges = 10.5% + 30000 INR. From 1st July 2017 after GST got implemented earlier charges Service Tax(4.5%) + VAT(1%) = 5.5% got replaced with 12% GST(6%CGST + 6%SGST).
6. Charges for Personal guarantor: There are some private finance institutions which ask for personal guarantee. This personal guarantor documentation work has to be properly executed on stamp paper along with other necessary and for that you will also be charged.
7. Charges for Delayed payment: Under the circumstance, when you miss or do delay in making the payment beyond the due date you will charged with certain fine amount. Fine charges will be varied from bank to bank.
8. Cheque bounce/EMI ECS missed charges: If the cheque given to pay your home loan installment (EMI) is dishonored or bounced due to insufficient balance in bank account; you will be liable to pay a charge as penalty. EMI stands for Equated Monthly Installment.
9. Home Insurance Policy(Optional): Besides all above charges and other fees, some banks or housing finance companies suggest on taking out an Home Insurance Policy. So that in the case of any uncertainty your home will be insured and you will be well compensated with such policy scheme.
In case if you cancel loan not all bank or housing finance companies will give full refund the fees paid. Some may retain a portion of the processing charges.
You can request an increase or decrease loan amount from the original loan at any point of time. If you ask for an increase in loan amount, you may be charged a fee. If you're looking at reducing your loan amount, the fee paid higher earlier is going to be adjusted in future payments.
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