OBVIOUS BEGINNING OF HOME BUYING
What are the types of housing loans available?
Step 1: Approach a Housing Finance Company with the latest salary slip and TDS Form
16 of the last two financial years of yourself and your co-applicant. The loan officer
will informally tell you the amount of loan you are eligible for, the areas in which
they finance flats and the terms of the same. Collect a loan application form and
confirm the needed documents (mainly proof of income). Visit more than one company
since you are likely to get better terms/ larger loan amount if you shop for the
Step 2: At your chosen HFC, submit the duly filled loan application, along with
the requested documents and an application fee (around 1%). They will then interview
you on the same. After conducting an appraisal of your application, the HFC will
give an in-principle sanction of your loan.
Step 3: You now have to submit your property documents, which should show a clear
title. The HFC will check these and levy an administrative fee (around 1%). It will
then disburse the loan, either fully or in installments, directly to the builder/
seller of the flat.
How much housing loan can one get?
It depends on a persons repaying capacity based on your income. You can add your
spouse’s income to increase the amount of loan.
What tax benefits are available in regards to the housing loans?
Tax benefits are available to consumers of house loans for the interest component
as well as principal component of the housing loans. The current budget has left
the upper limit of the interest payment deduction at Rs 150,000 per annum. The section
80C also allows tax benefits on principal repayments.
What is the reducing balance method of interest payment?
In reducing balance you reduce the amount of principal payment already paid by you
from the initial loan amount. You pay interest only on principal unpaid till that
point of time and not the entire loan amount.
What is floating interest rate?
In a floating interest rate, you interest payment will vary according to the market
lending rate. If interest rates rise your interest payments will rise and vice-versa.
You bear the risk of interest fluctuations in the market. Floating rates are slightly
cheaper than fixed interest rates.
What is fixed interest rate?
In a fixed interest rate, your interest rate is fixed over the entire tenure of
loan. For your loan requirements please contact: +91 8767607607