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HOME LOAN

Should I take Home loan now or wait ?

Home loan is a long term loan and is taken by customers on floating rates .Rates keep changing and timing on 20 year loan is impossible.
The Home loan rates will change in 20 years so thinking to start a loan at a lower rate has no relevance.
The right time to take a Home loan is when:
  • The Property you intend to buy is good and cannot be missed or it is expected that the price of property will rise.
  • The Emi that you have to pay per month is above your monthly expense budgets etc.

Jan 2015- Home loan Trend

  • Rbi has reduced rates and some Banks have already announced rate cuts.
  • The Home loan rates will come to single digits in times to come.
  • Expect rates to come down further after March 2015, when the flow of funds is better in Banks.
  • We expect Home loans to stay under 10% for most part of 2015.
  • Rates can hit as low as 9% if RBI pushes for it.

Most borrowed home loans

(Last updated on 29 January 2015)
Banks Loan to Property Value Interest Rates Apply
State Bank of India (SBI) 75% -90% 10.10% - 10.40%
HDFC Ltd 75% -80% 10.15% - 11.25%
LIC Housing Finance 75% -80% 10.15% (Fixed for 2 Years)
Axis Bank Home Loan 75% - 85% 10.15% - 11.75%
ICICI Bank Home Loan Upto 85% 10.10% - 11.25%
Fedbank Home Loan Upto 85% 10.35% - 10.70%
PNB Home Loan 75% - 80% 10.25% - 11.00%
PNB Housing Finance 75% - 80% 10.15% - 11.75%
IDBI Home Loan 75% - 90% 10.25% - 11.00%
ING Vysya Home Loan 75% - 80% 10.75% - 11.25%
DHFL Home Loan 80% - 85% 10.15%
Indiabulls Home Loan 75% - 80% 10.15% (Upto 25Lacs), then 11%
Allahabad Bank Home Loan 75% - 90% 10.25% - 10.50%
Bank of India Home Loan 75% - 85% 10.20% - 10.45%
Union Bank Home Loan 65% - 80% 10.25%
United Bank Home Loan 75% - 80% 10.25% - 10.50%
Uco Bank Home Loan 75% - 80% 10.20%
Bank of Baroda Home Loan 75% - 90% 10.25%
Kotak Home Loan up to 80% 10.25%
Vijaya Home Loan Upto 80% 10.30%
Standard Chart Home Loan Upto 80% 10.15%
Indian Bank Home Loan 80% - 90% 10.25% - 12.25%


Home Loan – Lets us Explain how this will go about and what are the Steps

The first step involved in the process is to find your property which is followed by the verification of property documents, post that the documents are examined & simultaneously you can start searching for the lender who can offer the BEST Home Loan Deal after checking your eligibility criteria.

Know the Home Loan Eligibility: Banks offer the loan amount based on your Income and the property value .They will give you max amount in which your emi of Home loan and others loans is 50-60% of your income.
Other factor is that value of property.

Select the Best Home Loan after evaluation: Comparing home loan interest rates is the primary feature in the home loan selection, however other fees & charges like Application fees, processing fees, legal charges should not be neglected when comparing various loan offers. To check the interest rates & other charges incurred by various banks, Deal4Loans has brought in a Home Loan Comparison Chart across various Banks.Banks offer Fixed and Floating rates in Home loans.

Most customers choose Floating rates

Applying for the Loan : After you have selected your lender, you have to fill in the application form wherein the lender requires complete information about your financial assets & liabilities; other personal & professional details together with the property details & its costs.

Documentation & Verification Process:
You are required to submit the necessary documents to the bank which will be verified together with the details in the application.

Credit & default check: Bank checks out the borrower’s loan eligibility (through repayment capacity) & the amount of loan is confirmed. The borrower’s repayment capacity is reached which is based on the income, salary, age, experience & nature of business etc. Bank also checks credit history through the Cibil Score which plays a critical role in deciding & approving your loan application. Low Credit Score implies that the bank upfront rejects your application on the basis of earlier credit defaults; on the other hand high credit score gives a green signal to your application.

Bank sanctions Loan & Offer letter to the borrower:
After the credit appraisal of the borrower bank decides the final amount & sanctions the loan, the bank further sends an offer letter to the borrower which constitutes the details like rate of interest, loan tenure & repayment options etc.

Acceptance Copy to the Bank: The borrower needs to send an acceptance copy to the bank after the borrower agrees with the terms & conditions in the offer letter.

Bank checks the legal documents: The bank further asks the legal documents of property from the borrower to check its authenticity so as to keep them as a security for the loan amount given. The next step involved is the valuation of the property by the bank which determines the loan amount sanctioned by the bank.

Signing of agreement & the loan disbursal: The borrower signs the loan agreement & the bank disburses the loan amount.

Documents required in Home Loan

Generally the documents required to processing your loan application are almost similar across all the banks; however they may differ with various banks depending upon specific requirement etc. Following documents are required by financial institutions to process the loan application:
  • Income
  • Age Proof
  • Address Proof
  • Income Proof of the applicant & co-applicant
  • Last 6 months bank A/C statement
  • Passport size photograph of the applicant & co-applicant
In case of Salaried In case of Self-employed
Employment certificate from the employer, Copy of audited financial statements for the last 2 years
Copies of pay slips for last few months and TDS certificate Copy of partnership deed if it is a partnership firm or copy of memorandum of association and articles of association if it is a company
Latest Form 16 issued by employer Bank statements Profit and loss account for the last few years
Income tax assessment order

How is my Home loan Eligibility Calculated

The borrower's eligibility of getting a housing loan depend upon his/her repayment capacity & the banks establish this repayment capacity by considering various factors such income, spouse’s income, age, number of dependants qualifications , assets, liabilities, stability and continuity of occupation and savings history. Eligibility Factors in Housing loan Your Home Loan eligibility is determined by your repayment capacity and the value of the Property
  • Income
  • Qualifications
  • Age
  • Spouse’s income
  • No. of dependants
  • Stability and continuity of occupation
  • Assets/LiabilitiesM.
  • Savings history.


The most important concern of banks in determining your loan eligibility is that whether or not you are contentedly able to pay off the amount you borrow.

The Second factor is the value of the Property

Banks are okay to fund 75-85% of property value but with the condition that you have income capacity that you can pay its Emi each month.

Home Loan applications received for 332,404 crores till 29 January 2015

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  • 49 lakh customers serviced to get  best Loan deals with deal4loans. Deal4loans views Published @ yourstory .com
  • As RBI cuts rate, should you go for fixed home loan Deal4loans views Published @ Economic Times online
 

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