HOME LOAN MUNJAAL

INDEX
An In troduction to Home loans Loan Eligibility & Cost Credit History Types Of Home Loan Services Available In Market Loans FAQs How to buy a house Different Players in Home Loan Market THE BENEFITS OF TAKING A HOME LOAN. Market share of the Players in Home Loan Market Vital Tips for Home Loans How much loan to take?

Bibliography

HOME LOAN MUNJAAL

An In troduction to Home loans

1. What is a Home loan?

Home loan is the sum of money a bank or financial institution lends you to help you buy your dream home.

By taking a home loan from a bank or a housing finance company you pledge your home as the lenders security for repayment of your loan.

The bank or financial institution will hold the title or deed to the property till the loan has been paid back with the interest due for it.

Home loans are generally taken for long tenures as the loan amount is usually a huge sum.

A home loan can be taken anywhere between 5 and 30 years.

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The amount of loan one is eligible for is dependent on the individuals credit profile.

2. What is a down payment? What are the ways in which one can source his / her down payment?
Generally as a thumb rule, banks or financial institutions lend 85% of the cost of the property. 15% of the money is expected to be paid as a down payment for the loan. Opting for a personal loan if you can afford that cost as well, pledging your investments, getting loan against your insurance policy etc. are some ways to liquidate your assets and pay your down payment.

3. Are there any specific loans available for NRIs?

Yes, there are specific loans that are tailored for the requirements of NRIs who wish to build or buy a home in India.

4. What is reverse mortgage?

This loan facility allows a senior citizen (above 60 years of age) eligible to apply for a reverse mortgage loan and avail 60% of the value of the residential property he resides in and retain the right to continue to reside there. The maximum tenure for this loan scheme is 15 years.

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Loan Eligibility & Cost

1. Who is eligible for a home loan?
Indians with a regular source of income, which includes salaried individuals, self-employed professionals, self-employed business people, NRI individuals and existing property owners who can pledge it as security for the loan, are all eligible for a home loan. The individual applying for the loan should be above 21 years of age, when the loan period begins and should be less than 65 years when the loan period closes.

2. What are the other factors, which are relevant for home loan eligibility?
- Purpose of the loan - (purchase of property, improvement, purchase of land) - Age - Income (savings history) - Experience & Qualification (stability and continuity of occupation) - Employer - Existing loans - Number of dependents - Credit History (Past repayment history) - Resident status (The maximum loan that can be sanctioned to a resident Indian is Rs.5, 000,000)

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3. What are the factors included in the total loan cost?

Registration charges, transfer charges and stamp duty costs apart from the actual loan amount are included in the total cost calculation of the home loan.

4. How much loan can one avail?

The amount of loan you can avail depends on factors like salary details, qualifications, employer/business, years of experience, growth prospects, alternate employment prospects and sources of other income, if any. Generally, about 40% of your monthly gross income can be availed as your loan amount. For self-employed applicants, profit is the benchmark that determines loan value. The longer the time frame for repaying the loan the lower the EMI and this also means you can opt for a larger loan amount. The loan amount you are eligible for is also dependent on other factors like the company you are employed with, the location of your residence and your credit history. To know how much money you are eligible for, to compare banks and figure who offers you the best loan bargain.

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5. What are the other costs that usually accompany a home loan?
Home loans are usually accompanied by the following extra costs:

a) Processing Charge: It is a fee paid to the lender when you apply for a loan. It could either be a fixed amount not linked to the loan or could also be a percentage of the loan amount.

b) Pre-payment Penalty: When a loan is paid back before the end of the agreed duration, a penalty is charged by some banks/financial institutions, which could be up to 5% of the amount pre-paid.

c) Commitment Fees: Some institutions levy a commitment fee in case the loan is not availed within a stipulated period of time after it is processed and sanctioned.

d) Miscellaneous Costs: Some lenders may levy a documentation or consultant charge.

e) Registration charges of the mortgage deed.

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6. What are the details of some of the incentives offered by housing finance institutions?
Some lending institutions sanction the loan without requiring you to identify a property as a prerequisite for eligibility a) Free accident insurance b) Discounts c) Waiving of pre-payment penalty d) Waiving of processing fee e) Free Property Insurance

7. When can one take a home loan?

You can take a home loan before or after identifying the property you want to purchase or when the property is under construction or for purchasing a plot of land for investment or to renovate an existing home.

8. Can one have a co-applicant for a home loan?

Yes, it is good to have a co-applicant. This can help you increase the loan amount you are eligible for as the income of the co-applicant is also taken into consideration. Providing additional security like bonds, fixed deposits and LIC policies will also help in enhancing eligibility.

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9. Who is eligible to be a co-applicant?

The co-owner of the property you are going to purchase should also be a co- borrower/co-applicant. The reverse however is not stressed by lending institutions. Financial institutions accept a parent or spouse as an ideal choice for a coapplicant. A fiance can also become a co-applicant but the loan disbursal will begin only after the submission of the marriage certificate.

10. What is EMI? How is it calculated?

An equated monthly Installment (EMI) is the amount of money that is paid back to the lender on a monthly basis. It is essentially made up of two parts, the principal amount and the interest on the principal amount equally divided across each month in the loan tenure. The EMI is always paid up to the bank or lender on a fixed date each month until the total amount due is paid up during the tenure. The EMI facility helps the borrower plan his budget. The EMI is calculated taking into account the loan amount, the time frame for repaying the loan and the interest rate on the borrowed sum.

HOME LOAN MUNJAAL 11. What is the difference between a fixed interest rate and floating interest rate?
A fixed interest rate remains constant throughout the loan tenure regardless of the market conditions whereas a floating interest rate can decrease or increase depending on market fluctuations. For instance, it increases when RBI hikes up short term interest rates. Banks usually quote the floating rate loans as their index rate (prime lending rate) plus or minus x%. Banks usually increase or decrease their prime lending rate when the RBI increases or decreases short term interest rates.

12. What are the different types of interest rates available?

Interest rates are quoted either as fixed flat rates or reducing balance rates. In the flat rate method of interest calculation, the outstanding loan amount is never reduced during the entire tenure of the loan even though you make payments monthly. In the case of reducing balance interest rates the EMI is calculated on the basis of daily, monthly, quarterly or annual rests. A rest indicates the time frame in which the bank will recalculate the EMI based on the amount of loan paid back and the frequency of any compounding interest rate. Suppose you have a loan with an annual rest then, though you pay a monthly installment, your benefit kicks in only at year end, here the bank gets to benefit. A monthly rest will recognize the reduction in the loan amount on a monthly basis, a quarterly rest does it every quarter while a daily rest will do it each day. The more closely the rest matches the frequency of your payments, the lower the total interest paid as the total outstanding loan amount is reduced by your monthly payments more frequently.

HOME LOAN MUNJAAL 13. What is an amortization schedule?

An amortization schedule is a table giving the reduction of your loan amount by monthly installments. The amortization schedule gives the breakup of every EMI towards repayment interest and outstanding principal of your loan.

14. What are the factors one need to keep in mind while comparing loan from different financial institutions?
A loan applicant needs to keep a few things in mind when comparing loans. The applicant needs to determine the kind of loan and the amount he wants to apply for. He needs to keep in mind the total cost of the loan, which will be paid up by the end of his loan tenure. The second step is to understand the terms and conditions under which financial institutions are offering the loan. Finally he needs to evaluate, which loan offer is the best bet for him. Search for your home loan at BankBazaar.com to gain access to the most interactive tools in helping you compare and evaluate the best deal you can get from any bank of your choice. Other factors that you should look out for are customer service levels and the average time the bank takes to process a loan.

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HOME LOAN MUNJAAL 15. Can one avail a tax rebate on my home loan?
Section 80C and Section 24 grant income tax rebates to people who have taken home loans. These tax deductions are capped at 1 lakh for the principal repaid and 1.5 lakhs for the interest repaid.

16. What are the loan tenure options?

You have the option of selecting a loan tenure you are comfortable with, ranging up to 25 years, provided the term does not extend beyond your reaching 65 years of age or retirement age, whichever is earlier.

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Eligibility Table
Minimum Age (in yrs.) Bank
Salaried Self

Minimum Income (in Rs.)

Salaried Income criteria not provided Self Income criteria not provided

Minimum Work Experience (yrs.)

Salaried Self

Residence Status (yrs.)

Salaried Residence proof not provided Self Residence proof not provided

Minimum 21 ICICI Bank

Minimum 21

Job Job experience experience not provided not provided

Minimum 18 years State Bank of India

Availability Availability of of sufficient, sufficient, regular and regular and continuous continuous Job Job Minimum 18 source of source of experience experience years income for income for not provided not provided servicing the servicing the loan loan repayment. repayment. Income criteria not provided Income criteria not provided Job Job experience experience not provided not provided

Residence proof not provided

Residence proof not provided

21-60 years HDFC Bank

25-65 years

Residence proof not provided

Residence proof not provided

Minimum 24 years Axis bank

Minimum 24 years

Income criteria not provided

Income criteria not provided

Job Job experience experience not provided not provided

Residence proof not provided

Residence proof not provided

Minimum 23 years Citibank

Minimum 23 years

Income criteria not provided

Income criteria not provided

Job Job experience experience not provided not provided

Residence proof not provided

Residence proof not provided

Minimum 21 years Union Bank of India

Minimum 21 years

Income criteria not provided

Income criteria not provided

Job Job experience experience not provided not provided

Residence proof not provided

Residence proof not provided

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Credit History
1. What is credit history? How does financial institution check on my credit history? a

A credit history is basically a record of your past repayments of loans and credit card bills. Also, there is a central bank of data available with the Credit Bureau of India Limited (CIBIL), where data from all the banks on existing loans and their repayment patterns of their customers are accumulated. Before approving your loan a financial institution always checks with CIBIL on your loan repayment track record.

2. Is the repaymen track record of my previous loans considered in calculating my eligibility for a new loan?
It definitely has its benefits! A good repayment track record could fetch you a higher loan amount at a lower interest rate as it is standing proof for your money management capabilities. In case of a bad repayment record you will be charged high interest rates and you will find it difficult to obtain a loan.

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HOME LOAN MUNJAAL 3. If a loan application is rejected, does that reflect on my record?
Every time you apply for a loan to a financial institution, your credit report with CIBIL is checked and the inquiry appears on the record. Many such inquiries will adversely affect the interest rates you are charged and will make your borrowing options limited as it suggests you are likely to be facing a financial crunch.

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Documentation
1. How can one apply for a loan?
When you are ready to apply for a home loan, you should evaluate your options by presenting your requirements with different banks. What was earlier a daunting task involving rushing from bank to bank for a series of discussions and bargaining for the best deal, is now just a simple 15 minute process thanks to BankBazaar.com. Search BankBazaar.com to find the best loan bargain that is most suited to your needs. Then get your documents ready for the Bank to collect it at your doorstep and begin processing your loan.

2. A document checklist, so that one can be ready when th Bank comes to collect it from my residence.
Make sure you check with your Bank or NBFC to figure out which of the following documents you need to submit, as the requirements differ from bank to bank.

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HOME LOAN MUNJAAL Here is a standard list of options for each document required.

A. Identity proof:
Driving license Voters ID Passport PAN card Ration card Employee ID Bank passbook Letter from a recognized public authority or public servant verifying your photograph Confirmation letter from your employer or another bank verifying your photograph

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HOME LOAN MUNJAAL B. Address Proof:

Driving license Voters ID Passport Ration card Bank passbook or Bank account statement LIC policy/ receipt Utility Bill - telephone, electricity, water, gas (less than 2 months old) Letter from any recognized public authority verifying residence address of the customer Letter from your employer

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HOME LOAN MUNJAAL C. Age Proof:

- Driving license

- Passport

- Bank passbook

- PAN Card

- Birth certificate

- 10th standard mark sheet

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D. Income Proof:
The following set of documents that detail your credit profile varies according to whether you are a salaried individual or a self-employed individual.

i. Self Employed/Entrepreneurs:
- A brief introduction of Business/Profession - Balance Sheet, profit and loss account statement of income, proof of income tax returns - for the last 3 years certified by a CA - Photographs - Receipts of advance tax payments if any made - A photocopy of Registration Certificate of establishment under Shops and Establishments Act/Factories Act - Registration Certificate for deduction of Profession Tax - Certificate of Practice - Receipts of Bank loans - Proof of investments (FD Certificates, Shares, any other fixed asset)

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HOME LOAN MUNJAAL ii. Salaried Individuals:

1. Income Proof (you just need to provide one of the options listed for income proof): - Latest Pay slip - Form 16 - Increment/Promotion letters - Appointment letter - Pay slip (Last 2 months) with salary account bank statement - Certified letter from Employer - IT returns (for three years)

2. Investment proof (FD certificates, shares, any fixed asset etc.)

3. Documents supporting the financial background of the borrower (his liability and assets if Any)

4. Photographs.

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Property Documents
A) If a flat is purchased from the builder, one needs the following supporting documents to submit to the bank.

1. Original copy of your agreement with the builder

2. 7/12 extract - This is issued by the concerned land authorities giving details such as the survey numbers, area, date from which current owner is registered as owner etc.

3. Property register card, which is obtained from the City Survey Department

4. N.A. permission for the land from the collector, if its agricultural - If the land is agricultural and is being utilized for residential/ commercial/industrial use, then such agricultural land has to be converted to non-agricultural land and a Non-Agriculture Order has to be obtained from the Collector of the district where the property is located.

5. Search Report and Title Certificate - A search report and title certificate can be obtained from an advocate who will conduct a survey of the title of the property by visiting the office of registrar. A legal opinion can avoid any legal hassles later and is mandatory to be filed with the agreement for sale.

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6. Development agreement between the owner of land and the builder

7. Copy of order under the Urban land Ceiling Act

8. Copy of building plans sanctioned by the competent authority

9. Commencement certificate granted by the Corporation

10. Building completion certificate

11. Latest receipts for taxes paid towards the land or property or flat to be purchased

12. Partnership deed or memorandum of association of the builders firm

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B) In case one is buying from a Cooperative Society, then ensure he /she has the following documents in place.

1. Original share certificate of the Society 2. Allotment letter from the Society in your name 3. Copy of the lease deed, if executed 4. Certificate of the registration of the society 5. Copy of the byelaws of the Society 6. No objection certificate from the Society 7. 7/12 extract or property register card in the Societys name 8. Copy of N.A permission for the land from the collector 9. Search Report and Title Certificate 10. Copy of order under the Urban Land Ceiling Act 11. Copy of the building plans sanctioned by a competent authority 12. Commencement certificate granted by Corporation 13. The latest receipts of taxes paid for the property 14. Original Agreement to assign / Deed of assignment

C) If one is constructing on your own land then one

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will need the following documents.

1. Original sale deed of land and extract of Index II 2. 7/12 extract or property register card in your name 3. Copy of N.A. permission for land from the collector 4. Search and title report 5. Copy of tax paid under Urban Land Ceiling Act (obtained from Commissioner ate of Urban Land Ceiling and Urban Land Tax) 6. Copy of the building plans sanctioned by a competent authority 7. Building permission granted by the Corporation 8. The latest receipts of taxes paid for your land 9. Estimate of the cost of construction certified by the architect

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3. What are the documents that need to submitted for disbursement of a home improvement loan?
Title deeds for the past of 13 years Encumbrance certificate for the past 13 years Khata certificate Most recent tax receipts for the property Approved plan License for the extension Cost estimate from a qualified engineer Cost estimate from the architect

4. What are the things one needs to keep in mind before one selects a property?
You need to check if the property is approved by the government and if it is registered. You need to evaluate if the location of the property is conducive to your familys needs. Schools, hospitals, shops, transportation facilities, the reputation of the builder, availability and consistency in the supply of power and water, security, parking facilities, location in a residential area etc. need to checked out.

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5. Is it a must to apply for insurance cover for ones property?

Though it is not a must, considering the huge sum of money spent on purchasing the property it is a sound practice to have it insured to protect yourself against any danger that might befall on the property. Usually property insurance comes as an incentive with your home loans after a certain period. Insurance rates are usually very affordable.

6. What is a No Objection Certificate?

This certificate states that it allows the property to be mortgaged by the bank. This comes into effect in instances like a co-operative society that owns the property but whose members have a right to reside in the premises and also transfer the rights to someone else. This is also true in the case of leased land on which property is built. In this instance, the property is owned by the borrower but the land on which the property is built legally belongs to a development authority. This certificate safeguards the interests of the Bank.

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7. When does a property become `pre-approved?
When a bank has already verified the title documents of the property of a particular builder, it files them in the bank records and labels them pre- approved. This means that when a buyer approaches the bank for purchasing a house or apartment in that property, the bank need not do a title verification process all over again.

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Processing the loan

1. What are the steps involved in taking a loan?
There are three steps to a home loan application 1. Application - You submit a completed application form with all the essential documents.

2. Sanction -

You get an approval for a specific loan amount based on the value of your property and repayment capabilities.

3. Disbursement - The loan amount is transferred to the applicant.

2. How long will it take for the financial institution to contact me after one submits my application?
Most financial institutions will contact you within one business day of your application being submitted.

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3. How long will it take for the financial institution to approve the loan?
Loan approvals are at the sole discretion of the financial institution. The time taken to approve a home loan is usually about a week, subject to the fact that all the required documentation has been submitted to the bank.

4. How soon will one get my loan amount? Once all necessary documents are submitted and the paperwork completed, including submission of the post dated cheques (PDC) or signed ECS (Electronic Clearing System) form, the financial institution will usually disburse your loan within seven working days of the loan approval.

5. Does the financial institution verify authenticity of the submitted documents and the details provided in my application? Yes, the financial institution will verify all submitted documents and the details provided in your loan application. Your application could be declined in case of any discrepancies.

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Types Of Home Loan Services Available In Market

Home Loan Home Improvement Loan Home Extension Loan Short term bridging Loan Land Purchase Loan Home equity Loan Short Term Bridging Loans Loans to Professionals for Non Residential Premises (NRP)

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HOME LOAN
You can apply for housing loans either for constructing a new house or to buy a new house or to buy a old house. You can apply for the loans either singly or jointly. With the housing loan you can get more than 75% of the total amount required for housing loans.

Home Improvement Loan

Gives facilitates any type of internal or external repairing in your house like plumbing, painting, electric works, grill works, flooring, structural improvements like painting, waterproofing, plumbing and electric works, tiling and flooring, grills and aluminum windows.

Home Extension loans

Home Extension loans is available for the customers who want to extend their homes i.e. building new floors or want to extend their constructed area in the available land.

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Short-Term Bridging loan

Short-Term Bridging loan makes you realise your dream of buying a bigger and better home and gives you time to sell your existing property to pay off the loan.

Land Purchase Loan

Land Purchase Loan facilitates to purchase land. It can be for dream house or an investment for the future.

Home Equity Loans

Home Equity Loans helps you encash the present market value of the property by taking a loan by mortgaging the property.

Short-Term Bridging loan

Short-Term Bridging loan makes you realise your dream of buying a bigger and better home and gives you time to sell your existing property to pay off the loan. This is a short term loan to help customers with the interim period between the sale of your old home and the purchase of a new home.

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Loans to Professionals for Non Residential Premises (NRP)

Indian citizens who stay abroad for employment or for carrying on business or vocation outside India or for any other purpose in circumstances indicating an indefinite period of stay abroad;

Government servants who are posted abroad on duty with the Indian missions and similar other agencies set up abroad by the Government of India where the officials draw their salaries out of Government resources;

Government servants deputed abroad on assignments with foreign Governments or regional/international agencies like the World Bank, International Monetary Fund (IMF), World Health Organization (WHO), Economic and Social Commission for Asia and the Pacific (ESCAP);

Officials of the State Government and Public Sector Undertakings deputed abroad on temporary assignments or posted to their branches or offices abroad.

HOME CONVERSION LOAN

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Available for those who have financed the present home with a Home Loan and wish to purchase and move to another home for which some additional funds are required. Through a Home Conversion Loan, the existing loan is transferred to the new home, including the additional amount required, eliminating the need for pre-payment of the previous loan.

BALANCE TRANSFER LOAN

Balance Transfer loans help you pay off an existing home loan with a higher interest rate, and avail of a loan with a lower rate of interest.

REFINANCE LOAN
This loan helps you pay off the debt you have incurred from private sources such as relatives and friends, for the purchase of your present home.

STAMP DUTY LOAN This loan is sanctioned to pay the stamp duty amount that needs to be paid on the purchase of a property.

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Loans FAQs
What is an EMI?
EMI (Equated Monthly Installment) is the amount payable to the lending institution every month, till the loan is paid back in full. It consists of a portion of the interest as well as the principal.

How is an EMI calculated?

EMI Formula: l x r [(1+r)n /(1+r)n-1 ] x 1/12 l = loan amount r = rate of interest n = term of the loan

What is the best way to select the cheapest home loan?

Keep the loan period constant and calculate the total amount paid for the home through the different loan options available.

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What are the incentives offered by lending institutions?

a) Some of the lending institutions sanction the loan without requiring you to identify property as a prerequisite for eligibility b) Free accident insurance c) Discounts d) Waiving of pre payment penalty e) Waiving of processing fee f) Free property insurance

How do HFCs decide on the loan amount?

Usually, most companies give up to a maximum of 85% of the cost of the house. The 15%, sometimes called 'seed money', will have to be provided by the loan applicant. The amount, for which the applicant is eligible, is determined by the age, income, no. of dependents, monthly outgoing and repayment capacity. This varies from case to case.

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Are securities required for home loans?

In most cases, the property to be purchased itself becomes the security and is mortgaged to the lending institution till the entire loan is repaid. Some institutions may ask for additional security such as life insurance policies, FD receipts and share or savings certificates.

Do I require a guarantor to get a home loan?

Some institutions ask for 1 or 2 guarantors, others require no guarantor at all.

What is the time required for loan application approval?

About 0-15 days.

What is the time required for loan disbursement?

On an average, loans are disbursed within 3-15 days after satisfactory and complete documentation and completion of all relevant procedures, including proof that 15% of the cost has been paid upfront to the seller of the property.

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Can I make joint applications for home loans?

Most institutions are willing to consider the joint incomes of the applicants for deciding the loan amount. Some institutions do not require the co-applicants to be co-owners of the property to be purchased.

Can the property be sold, even when the home loan is outstanding? :
Yes, the property can be sold after getting consent of the lending bank. This consent letter by the bank usually mentions the amount at which the home loan can be considered fully paid off. This amount is inclusive of prepayment charges as applicable and calculated at a future date to give you.

Can I get a home loan for purchasing a home overseas? :

No, currently no financial institution provides loan for purchasing a house abroad.

Is it necessary to get property insurance, while availing a home loan? :

It is advised to buy insurance as your home would be one of your most valuable assets. However, most banks do not stress on this issue.

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HOME LOAN MUNJAAL If the value of the underlying property falls does it affect the EMI amount or the tenure of the loan? :
No. fluctuating value of the property does not affect the EMI or home loan liability.

Can a fixed rate loan be converted to a floating rate loan and vice versa? :
Yes, you can convert floating rate home loan into a fixed rate one with no extra charges. However, banks charge a small fee for converting a fixed rate product to a variable rate product. The swap can be done any number of times and at any point of time.

What is a "pre-approved property :

Some real estate builders get their housing projects "pre-approved" by specific home loan lenders. These lenders examine the legal documents of the title of that project, the stage of construction as well as the builder's track record to complete the project in time. It then declares..

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How to buy a house

The home buying process can seem complicated, but if you take things step-bystep and you know how to choose the right home loan, you will soon be holding the keys to your own home!

Ten steps to buying a home:

Step 1: Figure out how much you can afford. What you can afford depends on your income, credit rating, current monthly expenses, down payment and the interest rate. The calculators can help, but it is best to visit a lender to find out for sure. A housing counselor can help you figure out how to manage and pay off your debt, and start saving for that down payment!

Step 2: Know your rights

Step 3: Shop for a loan. Save money by doing your homework. Talk to several lenders, compare costs and interest rates, and negotiate to get a better deal. Consider getting pre-approved for a loan.

Step 4: Learn about home buying programs

Step 5: Shop for a home. Choose a real estate agent, Wish list - what features do you want, Home-shopping checklist - take this list with you when comparing homes.

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Step 6: Make an offer. Discuss the process with your real estate agent. If the seller counters your offer, you may need to negotiate until you both agree to the terms of the sale.

Step 7: Get a home inspection. Make your offer contingent on a home inspection. An inspection will tell you about the condition of the home, and can help you avoid buying a home that needs major repairs.

Step 8: Shop for homeowners insurance Lenders require that you have homeowners insurance. Be sure to shop around.

Step 9: Sign papers. You're finally ready to go to "settlement" or "closing." Be sure to read everything before you sign!

Step 10: The House is yours now. Have Puja or hawan.

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Different Players in Home Loan Market

Banks Providing Home Loan :
ICICI BANK SBI BANK AXIS BANK BANK OF BARODA CANARA BANK PUNJAB NATIONAL BANK HDFC BANK CITI BANK UNION BANK OF INDIA IDBI BANK

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ICICI Bank is the largest provider of Home Loans in India. ICICI Home Loans offer unbeatable benefits to ensure that its clients get the best deal without any hassles. ICICI Bank Home Loans provide loans not only at competitive interest rates, but also are so designed that they cater to the specific needs of consumers. New products / new features in existing products are introduced from time to time based on customer feedback. ICICI Bank offers easy home loans for purchase or construction of flat or house.

The benefits associated with ICICI Home Loans which give them an edge over other players in the market are:

Attractive and customer friendly loan interest rates Loans as low as INR 0.2 million is available Term loans up to 20 years is available Loans come with a Free Personal Accident Insurance Policy Premium charged in case of insurance options for Home Loans is also attractive. Simplified Documentation Doorstep Service Home Loans can be sanctioned even before selecting a property
(All the above facilities are situational and subject to changes according to the company's discretion.)

The Various policies or terms of ICICI Home Loans are:

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Fixed Rate Home Loan

Adjustable Rate Home Loan or Floating Rate Home Loan

Partly Fixed and Partly Floating Rate Home Loan

Smart fix Home Loan

Money saver Home Loan

The other types of loans include Land Loans, Office Premises Loans, Home Improvement Loan and Home Loan for NRI. One can also leverage his/her existing property to get a Loan against Property, Property Overdraft or Lease Rental Discounting. All of these are available at a fixed rate or an adjustable rate or interest.

Another significant feature of ICICI Home Loans is that it allows the customer transfer the balance of his/her existing home loan from other banks. Moreover, the Home Loans are also liable to tax benefits. Thus, for all good reasons mentioned above, ICICI Home Loans have been and will be the most sought after in the distant future.

Loan Feature

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Loan Amount Interest Rate Tenure Pre Payment Charges Service Charges 80% of the cost of the property N.A. Maximum 20 years 2% on the principal outstanding

0.5% - 1%

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State Bank Home Loans

"THE MOST PREFERRED HOME LOAN PROVIDER" voted in AWAAZ Consumer Awards along with the MOST PREFERRED BANK AWARD in a survey conducted by TV 18 in association with AC Nielsen-ORG Marg in 21 cities across India. SBI HOME LOANS now offers Interest Rates concessions on GREEN HOMES in accordance with SBI's commitment to Environment protection. SBI Home Loans come to you on the solid foundation of trust and transparency built in the tradition of State Bank of India.

SBI Home Loans Unique Advantage

Package of exclusive benefits. Lowest interest rates. Further, we charge interest on a daily reducing balance!! Low processing charges. No hidden costs or administrative charges. No prepayment penalties. Reduce your interest burden and optimally utilize your surplus funds by prepaying the loan. Over 12000 branches nationwide, you can get your Home Loan account parked at a branch nearest to your present or proposed residence.

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HOME LOAN MUNJAAL Products :

SBI Maxgain (Home Loan as an overdraft) SBI Realty SBI Home Plus NRI Home Loans SBI Tribal Plus Gram Niwas Sahyog Niwas SBI Green Home Loan SBI Surakshit Home Loan SBI Yuva Home Loan SBI Home Loan PAL ( Pre-Approved Limit )

Loan Feature
Loan Amount Interest Rate Tenure Pre Payment Charges Service Charges 40 to 60 times of Net Monthly Income 12.25 % p.a. Maximum 25 years Not provided

0.50% of Loan amount

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Axis bank
Axis Bank's Power Home puts an end to your Real Estate troubles. Augment your reach and buy the house that you've set your heart on.

Features

Attractive housing finance rates: We offer attractive interest rates that make your housing loans affordable and easier on your pocket every month. Flexible rates: Choose between fixed and floating rate options depending on which way you think interest rates are moving. Balance transfer facility: Not satisfied with your existing home loan provider? You can transfer your home loan to us without any hassles. Doorstep service: You don't have to go the bank for home loans; the bank will come to your doorstep. Perfect for those leading busy lives. Nil prepayment charges: Come into some money and want to pay off your housing loan early? You can do that at Axis Bank without worrying about prepayment charges. Quick and transparent processing

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Terms and Conditions By AXIS BANK
Repayment Repayment period for home loans shall not exceed 25 years. Repayment period of pre-allotment bookings of housing loans shall not exceed 1 year Repayment period of improvement or renovation or extension of existing property shall not exceed 10 years. Security Equitable mortgage of the property to be financed by way of deposit of title deeds. Disbursement The loan will be disbursed in full or in suitable installments, taking into account the requirement of funds and progress of construction, as assessed by the Bank directly to seller or builder or local development authority or supplier of materials etc. Processing charges or admission fee Processing fee equivalent to 1% of the loan amount (applied for) will be collected along with the application form (taxes as applicable). Penalty for early closure Nil.

Other Conditions Bank reserves the right to reject any application without assigning reasons thereof The applicant will undertake to inform the Bank as and when there is a change in address or employment The terms and conditions mentioned above and elsewhere under the scheme are subject to modification from time to time solely at Bank's discretion.

Loan Feature
Loan Amount Interest Rate Tenure Pre Payment Charges Service Charges Upto Rs. 50 lacs N.A. Tenure not mentioned Pre-payment charges not mentioned 0.5% of the loan amount

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Features of PowerPlus scheme by Axis Bank
Fixed interest of 8% p.a. for 12 months & floating thereafter Balance Transfer facility Doorstep service Nil Prepayment charges

AXIS Bank Home Loan has recently seen slashing down in interest rates on its floating rate housing loans by 25 basis points with effect from November 25, 2007. UTI Bank is now working under the name of Axis Bank. UTI bank offers a home loan for:

Purchasing a plot and constructing a house on it Constructing a house on an already owned plot Purchasing a house/flat but that shouldn't be more than 15 years old For renovating/extending an old house/flat Take-over of existing housing loan Home Loan to NRI on the purchase of ready reside

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HOME LOAN MUNJAAL

Bank of Baroda

Home Loan is available for:

Purchase of new / old dwelling unit. Construction of house. Purchase of plot of land for construction of a house. Repaying a loan already taken from other Housing Finance Company / Bank. Repayment period up to 25 years (floating rate option).

BOB offers following benefits :

Free Property and Personal Accident Insurance (available for stipulated tenure of loan). Free Credit Card - "Paras" card (Complimentary for first year) to all new home loan borrowers with loan limit of Rs. 2/- Lakhs and above Advance up to 90% of the principal amount of home loan repaid for any requirement ('AAA'). As per current IT provisions - Interest on loan upto Rs. 1.5 Lakhs per annum is exempt from income tax (Under section 23/24(I) of the Income Tax Act).

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HOME LOAN MUNJAAL Loan Feature

Loan Amount Interest Rate Tenure Pre Payment Charges Service Charges Upto 90% of the principal amount of home loan 9.50% - 10.75% 20 Years Upto 2%

Service charges not provided

Processing charges:
Baroda Home Loan (Resident Indians) - Loans upto Rs. 20/- lacs : 0.35% - Loans above Rs. 20/- lacs : 0.40% - Maximum : Rs. 15000/Baroda Home Loan to NRIs / PIOs - Loans upto Rs. 20/- lacs : 0.35% - Loans above Rs. 20/- lacs: 0.40% - Maximum : Rs. 15000/-

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HOME LOAN MUNJAAL Terms & Conditions by BOB

Income Criteria:
Monthly Income Up to Rs. 20,000/More than Rs.20,000/- & up to Rs. 1 lac More than Rs. 1 lac Modified Criteria 36 times of monthly income 48 times of monthly income 54 times of monthly income

Margin:
Monthly Purpose income Upto Rs.20000/- Purchase of plot House/flat already constructed from own resources All other cases Above Purchase of plot Rs.20,000/House/flat already constructed from own resources All other cases Margin 20% 25% 20% 20% 20% 20%

As security against the loan amount, the bank will take an equitable mortgage of the housing property and/or other suitable securities. No Fees will be charged on part prepayment / full prepayment of the loan amount from own sources. The loan can be repaid in a maximum period of 25 years taken under floating rate option subject to the period up to age of retirement in case of salaried persons and 65 years in case of others. In case of full prepayment or foreclosure (other than from own sources) fees will be charged at 0.5% for each year of the residual period subject to maximum of 2%.

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HOME LOAN MUNJAAL

Canara Bank

We provide loans for : For construction / purchase / repairs / additions / renovations of residential house / flat including the purchase of land and construction thereon. For taking over of the Housing Loan liability with other recognized Housing Finance Companies, Housing Boards, Co-operative Banks, Co-operative Societies and Commercial Banks at our prevailing low rate of interest.

Eligibility: Salaried individuals, individuals engaged in business / professionals and self-employed persons. NRIs are also eligible to avail loans without specific permission of RBI. Persons above the age of 55 years are also eligible subject to certain stipulations. of RBI.

We finance upto:

4 years of gross salary to salaried individuals. 4 years' gross annual income to individuals engaged in business or to selfemployed persons. For NRIs up to 2 years' gross income and selectively up to 3 years' gross income. Selectively loan upto 5 years' gross salary/ income also permitted Rs.7.5 lacs for repairs / renovations / additions to the existing house / flat. Selectively upto Rs.15 lacs in Metro Centres.

What is your contribution?

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HOME LOAN MUNJAAL

Loans upto Rs.20 Loans above Rs.20 lacs lacs New house / flat (including those for purchase of 15% 20% site & construction of house thereon) Old house/flat 20% 25% Margin - 25 % for both new and old houses in respect of housing loans for acquiring second house / flat i.e., where the applicant is already owning a house/flat with or without loan. Rate of Interest (Rate of interest is subject to change from time to time) Additional interest @ 0.25 % over and above the stipulated rates for acquiring second house/flat. Security:

Mortgage of House / Flat

Repayment:

In convenient equated monthly instalments upto 25 years or borrow attaining age of 70 years whichever is earlier (subject to conditions).

Processing Charges:

0.50% of the loan amount minimum of Rs. 500 and maximum of Rs. 10,000 and no hidden cost. No application fee.

Prepayment : At your choice. We do not levy prepayment penalties except in case of takeover of the loan by other bank/HF institution.

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Loan Feature
Loan Amount Interest Rate Tenure Pre Payment Charges Service Charges Upto Rs.1 crore 08.75% - 10.00% 20 years Nil

0.50% of the loan amount

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HOME LOAN MUNJAAL Punjab National Bank

PNB reaches out to you with fast, friendly and most convenient home loans for construction or purchase of house/flat, purchase of house/flat on First Power of Attorney basis from the original allottee and carrying out repairs/renovations/additions/alterations to existing house/flat.

Schemes by PNB :

1. Apna Ghar Yojana 2. Ghar Sudhar Yojana 3. Loan Against Property 4. Loan for Commercial Property 5. Future Rental Securitisation

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Loan Feature
Loan Amount Interest Rate Tenure Pre Payment Charges Service Charges 75% of the cost the house N.A. Upto 25 years or before the borrower attains the age of 65 years Not mentioned

0.90% of the loan amount

Eligibility Criteria : Home Loan

Salaried Age Income Job Experience Residence Proof Age criteria not provided Income criteria not provided Job experience not provided Residence proof not provided Self Age criteria not provided Income criteria not provided Job experience not provided Residence proof not provided

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HOME LOAN MUNJAAL HDFC Bank

HDFC Bank brings, HDFC home loans to your doorstep. Over 3 decades of exclusive experience, a dedicated team of experts and a complete package to meet all your housing finance needs, HDFC Home Loans, help you realize your dream.

HDFC Home Loan Advantages Counselling and advisory services for acquiring a property Instant Home Loan Approval Widest range of home loan products & services like Home Loans, Home Improvement Loans, Home Extension Loans, Loans to professionals for office or clinic, Home Equity Loans (Loan against Property), Short Term Bridging Loan etc. Loan from any office for purchase of home anywhere in India Loan approval even before a property is selected Flexible loan repayment options like Step Up Repayment Facility, Flexible Loan installments Plan, Tranche Based EMI, Accelerated Repayment Scheme Vast network of over 289 offices in India, offices in Singapore, London & Dubai and franchises in the Gulf Cooperation Council (GCC) region. Click here to find the nearest HDFC Office. Most experienced and empowered personnel to ensure smooth & easy processing Free & safe document storage Online loan application facility

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Tranche Based EMI

Customers purchasing an under construction property need to pay interest (on the loan amount drawn based on level of construction) till the property is ready. To help customer save this interest, we have introduced a special facility of tranche Based EMI. Customers can fix the installments they wish to pay till the property is ready. The minimum amount payable is the interest on the loan amount drawn. Anything over and above the interest paid by the customer goes towards Principal repayment. The customer benefits by starting EMI and hence repays the loan faster.

Accelerated Repayment Scheme

Accelerated Repayment Scheme offers you a great opportunity to repay the loan faster by increasing the EMI. Whenever you get an increment, increase in your disposable income or have lump sum funds for loan prepayment, you can benefit by: Increase in EMI means faster loan repayment Saving of interest because of faster loan repayment You can invest lump sum funds rather than use it for loan prepayment. The return from the investments also gives you the comfort of paying the increased EMI.

Purpose HDFC Home Extension Loan makes it convenient for you to extend

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or add space to your home. Be it an additional room, a larger bathroom, or even enclosing an open balcony. Maximum loan 80% of the cost of extension. This is however subject to valuation of the property as assessed by HDFC. Maximum Term 20 years subject to your retirement age Applicant and Co- Applicant to the loan Home Loans can be applied for either individually or jointly. Proposed owners of the property, will have to be co-applicants. However, the co-applicants need not be co- owners.

Interest Rate
Wef : 1st Aug 2011 Applicable Rates (Monthly Rest Basis) Upto and including Rs 30 lacs Rs.30.01 lacs to Rs.75 lacs Over Rs.75 lacs Fixed rates% 12.25 12.50 13.00 Variable rates% 10.75 11.00 11.50 RPLR: 16.50% Basis% RPLR RPLR - 5.75 RPLR -5.50 RPLR - 5.00

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HOME LOAN MUNJAAL

Loan Feature
Loan Amount Interest Rate Tenure Pre Payment Charges Service Charges Upto Rs. 5 crore N.A. Maximum 25 years 2%

1% of the loan amount

Other Charges : Home Loan

ApplicationFee: Upto 1% of the loan amount. BookingFee: Upto1% of the loan amount sanctioned . Pre-closure charges: 2%

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Citibank

Citibank has financed the dream homes of many Indians. Our Home Loan offerings are unique and make us the preferred choice among customers.

Citibank Home Loans in India give Home Loans from Rs 2.1 Lakh to Rs 5 Crore, which can be returned in 25 years. Citibank is fully dedicated to make your dream of getting a home come true. Eligibility criteria for salaried and self-employed person are different. Salaried person is eligible to take loan if he has gross annual income of Rs 1, 00,000 or above, with age between 23 and 58 years and at least 2 years of work experience. Whereas a self-employed person can have home loan if his gross annual income is Rs. 85,000 or above, age between 23 and 65 years along with 3 years of continues experience. The home loan is given with the tenure of at the max 25 years and can be repaid by anyone following way through EMI (Equated monthly Installments) as

Post dated Cheque (PDC) Standing Instruction (SI) provided by Citibank banking account Electronic Clearing System (ECS)

Citibank Home Loans can be taken for:

Property under construction Self-Construction Plot plus self construction

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HOME LOAN MUNJAAL Loan Feature

Loan Amount Interest Rate Tenure Pre Payment Charges Service Charges Upto Rs. 5 crore N.A. Maximum 25 years 2%

1% of the loan amount

Other Charges : Home Loan ApplicationFee: Upto 1% of the loan amount. BookingFee: Upto1% of the loan amount sanctioned. Pre-closure charges: 2%
Eligibility Criteria : Home Loan

Salaried Age Income Job Experience Residence Proof Minimum 23 years Income criteria not provided Job experience not provided Residence proof not provided

Self Minimum 23 years Income criteria not provided Job experience not provided Residence proof not provided

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THE BENEFITS OF TAKING A HOME LOAN.

The income tax authorities look with favour upon those servicing a housing loan from specified financial institutions. And, it is up to you to be wise enough to take advantage of this.

LET'S START WITH SECTION 24 OF THE INCOME TAX ACT. Interest paid on capital borrowed for the acquisition, construction, repair, renewal or reconstruction of property is entitled to a deduction. Rs 1,50,000 is the maximum amount eligible for deduction in the case of selfoccupied property and for Rented out property there is no limit of amount of deduction.

THAT BRINGS US TO SECTION 80C OF THE INCOME TAX ACT. You get a maximum Rs.1,00,000 deductions from the Income, on repayment of principal during a financial year. Stamp duty, registration fee or other such expenses paid for the purpose of transfer of such house property to the assessee is also considered under this amount.

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Market share of the Players in Home Loan Market

SBI ICICI HDFC BANK OF BARODA AXIS BANK OTHERS

38% 10% 9% 7% 6% 38%

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Vital Tips for Home Loans

To increase your loan eligibility, combine your income with that of your spouse, children or parents Always negotiate - the first home loan interest rate quoted is never the final rate Before paying the loan processing fee request lender for preliminary check on the property Buy Loan Protector Life Insurance - ensure your family can use the house if you are not alive Immediate disbursement get best rates talk to home loan providers when you are close to finalizing your property

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How much loan to take?

Please consider the following factors before deciding upon the size of your loan:

A. Income
You need to consider the amount of money that you earn as well as the stability of your income. Many people choose to take a more expensive home upfront as they think that their income will increase as a result of their income growth and career progress. This will make even large EMI payments an ever decreasing percentage of their monthly expenses.

Some of the questions that you need to answer before making this decision are: How much increase do you expect on a yearly basis? How confident are you in getting this raise? Is there any risk of you losing your job such that you might not be able to afford to pay the EMI? What are your chances of getting a new job in case you lose your present one? Will large EMI payments interfere with your goals of retiring early, taking a mid career break, or even paying for your children's education and marriage? Will your spouse continue to work and financially contribute to the household during the tenure of the home loan? Do you expect to get a lump sum bonus or variable pay at the end of the year that can be used to fund your home purchase Have a realistic view of what your income and career prospects can support don't be over optimistic about your future income.

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HOME LOAN MUNJAAL B. Personality

No two people have the same personality or attitude towards debt. Some people can sleep soundly at night knowing that they owe Rs.30,000 per month for the next 25 years. Other people worry about taking a loan for such a long tenure. Know your personality type can you live with a big loan or would you feel safer with a small loan?

C. Expenses
The home loan lender calculates your loan eligibility based on your current debt and monthly expenses. You must identify whether you might have other expenses that you currently do not have, but expect to incur in the near future.

Do you have plans to buy a new car? Where will you fund the EMI for the car from?

Have you planned for your children's college education and marriage?

Will you need money for these activities, and will you still have enough to pay fund these after your home loan EMI?

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HOME LOAN MUNJAAL D. Lifestyle

In life one has to prioritize one's goals and activities to achieve what is important to us. Are you willing to change your lifestyle to get the house you want? Maybe if you cut your spending a little, the bigger loan just might be within your reach. Ask yourself whether you and your family can handle:

Fewer shopping trips to the mall

Less frequent expenditure on entertainment movies, eating out, latest cell phones

Fewer vacations, or take a domestic vacation instead of going abroad

Sometimes you do not realize how much of your money is going towards useless expenditure. If you can cut down on this, then maybe you can afford a bigger home loan. Discuss with your family the pros and cons of taking a bigger loan and cutting down your family's lifestyle related spending. And do remember that it always pays to compare home loans before taking any decision.

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Bibliography
www.rbi.org.in

www.indiahousing.com

www.google.com

www.statebankofindia.com

www.icicibank.com

www.hdfcbank.com

www.apnaloan.com

www.axisbank.com

www.lichousing.com

www.loanboss.com

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