Home Loan Process

Once you decide to invest in a home, you can apply for a Home Loan. Yes, even before you have selected the property.

Eazeeloans.com helps you to get the best rates in Mumbai.

Various stages in a Home loan process is basically divided in three stages :

1. Pre-Approval
   
2. Legal and Valuation
   
3. Disbursal
   

Pre-Approval
This is basically an individual credit approval based on the financials and Personal Identification documents like Photographs, Photo Identity, Signature Proof, Date of Birth Proof, etc.

Legal and Valuation
In This process the property documents are examined by the banks valuer who checks the legality of the documents and evaluates the market value of the property.

Disbursal
This is the final stage wherin the customer gets the disbursement after submitting all the original documents as per the valuation report and signing of the agreement between the bank and the applicants of the loan.

Refinancing is also possible within 6 months from the date of purchase of property .

Q. How is Eligibility Caculated?

Various factors are taken into account when assessing the repayment capacity. Income, age, number of dependants, qualifications, assets and liabilities, stability /continuity of employment /business and subject to maximum provided by the bank, to name some factors.

Q. How can eligibility be increased ?

A spouse can be a co-applicant if he /she is earning. The incomes can be clubbed to enhance the loan amount.

You can also include blood relations like parents / children as co-applicants for higher eligibility.

Additional securities like bonds, fixed deposits and LIC policies may also help to enhance eligibility.

The final amount to be sanctioned will depend on the repayment capacity and the maximum provided by the lending bank.

Q. Who can apply for a Home Loan ?

• Salaried Individuals.
• Self employed Professionals /Business men.
• NRIs .



Requirements



• Min Age should be 21 years when the loan is sanctioned .
• The loan tenor is from 5 years - 25 years subject to a maximum till 58 /60 years or retirement, whichever is earlier in case of salaried and for self-employed before 65 years.
  
• Co-Applicant with income and lower age can be taken for increasing the tenor.

Q. What are the Features of Home loan ?

• Attractive interest rates.
  
• Door-step service from enquiry till loan disbursal.
  
• Balance transfers from other banks possible.
  
• Maximum loan 80/90% of the cost of the property (including the cost of the land) and based on the repayment alignment of the customer.
  
• Floating and Fixed Home Loan Interest available.
  

Q. What are the features of Home loan?

• Attractive interest rates.
• Door-step service from enquiry till loan disbursal.
• Balance transfers from other banks possible.
• Maximum loan 80 / 90% of the cost of the property (including the cost of the land) and based on the repayment capacity of the customer.
• Floating and Fixed Home Loan Interest available.

Various rates offered in Mumbai

• Floating Rate
• Fixed Rate
• Home saver

* Floating Rate Home Loan

Loan under Floating / Adjustable Rate is linked to Retail Prime Lending Rate rates of banks. The Rate of interest will be revised every time there is a change in Retail prime lending rate. Generally the EMI is retained and the tenor of the loan is increased /decreased as applicable.

* Fixed Rate

Currently some banks are offering fixed rates only for 3 years at a relatively higher rate than normal post which the loan reverts back to a floating rate.

Home saver
A home saver product enables the customer to earn optimal yield on their savings by reducing interest burden on Home Loans. The loan is sanctioned as an overdraft with added flexibility to operate the Home Loan Account like Savings account or Current Account with Cheque Book / ATM-cum-Debit Card/Net Banking facility for the purpose.

Customers can deposit their surplus funds / savings in the account to take advantage of lesser interest for the period the excess amount is retained in the account with an option to withdraw whenever required.

This facility is available at a comparatively higher rate of interest than normal.

Repayment

Repayment is normally done through Equated Monthly Installments (EMIs) comprising both principal and interest. Normally post-dated cheques (PDC) are taken in advance ranging from 12 months onwards.

Documents Required.

The following documents needs to be submitted for Pre-Approval :

* Application form with photograph.
* Identity and Residence Proof.
* Latest 6 months Salary-slips-for salaried.
* 3 years I T Returns-for self employed.
* Education /Qualification Certificate.
* Proof of business existence- min 3 years..
* Form 16 / Last 3 years Income Tax returns.
* Business profile .
* Last 6 months bank statements.
* Processing fee cheque for valuation payable to the bank.

Fees
Currently ranges from 0.5%- 1% of the loan amount applied plus applicable service taxes and surcharge.

Part Payment / Prepayment.

Part/ Prepayment of loan are possible. Currently no prepayment charges is applicable.

Q. For what purpose can I avail a home loan?

You can take a loan for constructing a house, purchasing of a ready possession house / flat or a flat in resale, takeover of existing loans from approved banks / housing finance companies, the purchase of a plot of land, for renovation of and extension of the house.

Q. Who can avail of the loan?

Salaried individuals, Self employed professionals or businessmen and individual NRI's.

Q. Who can be a co-applicant for the loan?

All co-owners need to be co -applicants. Spouse /parents /children can be co-applicants and his / her income can be clubbed to enhance the loan amount.

Q. What security is to be provided?

Security for the loan is a first mortgage of the property to be financed, by way of deposit of title deeds /or such collateral security as may be necessary.

The title to the property needs to be clear, marketable and free from encumbrance.

There should not be any existing mortgage, loan or litigation, which is likely to affect the title to the property adversely.

Q. Can loan be repaid ahead of schedule?

Yes, the loan can be paid ahead of schedule.

Q. Are the Bank policies subject to change?

Yes. These policies are reviewed periodically.

Q. How is the loan repaid?

The loan is repaid through EMI (equated monthly installment).

Q. What is an EMI?

An EMI refers to an equated monthly installment. It is a fixed amount which one pays every month towards the loan. It comprises of both, principal repayment and interest payment.

Q. When does the repayment start?
EMI payments start from the month following the month in which the full disbursement has been made.

Q. What happens in case if a PDC bounces?
In the case of a bounced cheque or delayed payment, charges and outstanding dues will be charged as per the prevailing company policy.

Q. What is pre-EMI interest?

In the case of part disbursement of the loan, monthly interest is payable only on the disbursed amount. This interest is called pre-EMI interest (PEMI) and is payable monthly till the final disbursement is made, after which the EMIs would commence.

Q. What is the minimum /maximum loan amount?

Home loan are availabe from 5 lakh to 5 crores.

Q. What is the time frame for a loan to be approved?

It takes a 7/10 working for the loan to be sanctioned after submission of all documents.

Q. When is the loan disbursed?

The loan will be disbursed on :
- Submission of the legal documents.
- Legal and technical clearance of the property
- Submission of Registered copy of agreement.

- Execution of agreement and collection of PDC.

Q. What is an amortization schedule?

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