A home loan is a residential mortgage taken by an individual or family who wishes to purchase a piece of real estate in the form of a house, apartment, condominium, villa or a row house. Housing loans can also be obtained for building a house, repairing or renovating the interiors of an existing house. Home loans are easily available and are categorized into various interest rates(fixed or floating), as per the borrowers needs and repayment capacity.
Anyone, including Non Resident Indians, with a steady source of income.
Loans are generally disbursed up to a maximum of 85% of the cost of the apartment. In most cases, housing loan is sanctioned depending upon the repayment capacity and income of the proposed borrower. Spouse's income can be included, if a person wants to increase his/ her eligibility for the loan. The maximum loan that can be sanctioned varies with housing finance companies/ banks and it ranges from Rs. 10 lakh to Rs. 1 crore.
Equated Monthly Installment (EMI) is the amount comprising of portion of the interest and the principal loan amount which is payable by a borrower to the lender every month.
A fixed rate housing loan is a loan where the rate of interest is constant through the entire term of the loan.
A floating interest rate housing loan is a loan where the interest rate payable is linked to market conditions such as the lender bank's retail Prime Lending Rate (PLR). A floating interest rate fluctuates as the bank rate varies. Floating interest rates are generally lower than fixed interest rates.
Latest salary slips (proof of income for salaried individuals)
Proof of age
Proof of Residence
Bank statements for the previous six months
For Self-Employed : Certified copies of balance sheet, profit and loss statement and tax challans/ tax returns for the previous 3 years.
For partnership/private limited companies : The Articles of Association, Partnership deed and details about the firm.
For NRIs : Latest salary certificate specifying name (as it appears in the passport),date of joining, passport number, designation, salary and perquisites, photocopy of labor card/ identity card, photocopy of valid resident visa stamped on thepassport, photocopy of monthly statement of local bank account and otherproperty related documents.
Other than housing finance companies, one can avail finance against Provident FundAccount, Fixed Deposits, PostOffice Savings; against Shares and Debentures oflisted companies and Government Bonds and Securities.
Taking a home loan seems like a judicious option when the resources on hand may be insufficient to buy a lifetime asset like your dream house. A home loan financially helps individuals who cannot pay the entire sum required to purchase their dream house.