Top 12 Terms You Must Know Before Taking Home Loan!

Updated on March 7, 20198 mins read
taking a home loan

Updated: January, 2018 Taking a home loan is a mammoth task, especially with all the paper work and cumbersome legal formalities involved. A lot of first time home loan customers are unfamiliar with several loan jargons and find themselves at a loss while dealing with bank officials and builders. But taking a home loan is one of the biggest financial liabilities you will incur. Thus, before you take the leap, you must familiarize yourself with related terms and common practices. So, we have compiled a list of 12 Common Terms You Must Know Before taking a Home Loan: Taking a home loan Click on the topic you want to know more about or just scroll down and read them all, 1) Margin 2) Offer/Sanction Letter 3) Post Dated Cheques 4) Disbursement 5) Equated Monthly Installments (EMI’s) 6) Pre – EMI 7) Resale Property? 8) Pre – Approved Property? 9) What is Credit Appraisal? 10) Is Pre-payment of Home Loan Beneficial? 11) Security 12) Processing and Administrative Fees

1. What is Margin?

In 2010, RBI set a ceiling limit on home loans which limits the amount of loan one can take against property to 80% of the property value. This means that while the bank pays 80% of the total cost of your property, the remaining 20% needs to be paid by you. This remaining amount is referred to as margin or down payment. For example, if you purchased a property worth 75 lakhs, then the bank can fund up to 80% of total amount, which is 60 lakhs. So, the remaining 15 lakhs has to be paid by you. However, in practice a lot of other factors determine an applicant’s loan eligibility. Note: In June, 2017 this limit was enhanced. Now for loans up to 30 Lakhs, banks can fund up to 90% of the property value. The higher the margin amount, lesser will be your loan amount, reducing the total cost of your property (since interest paid on home loan adds on to total cost of property).

2. What is an Offer/ Sanction Letter?

An offer letter is a formal confirmation from the bank stating that it has agreed to consider you as one of its loan customers. It does not confirm sanction of home loan. The loan will be disbursed after a verification of all legal documents and eligibility of applicant. The validity of a sanction letter is generally around 6 months. If the loan is not availed during this period, the sanction lapses and the entire process needs to be reworked if applicant approaches bank again. A sanction letter usually states the following;

  • Amount of loan sanctioned
  • Loan tenure
  • Interest rate applicable
  • EMI and pre-EMI amounts applicable
  • Validity of sanction letter
  • Terms and condition of loan agreement

3. What are Post Dated Cheques?

Taking PDCs for home loan repayments is a common practice banks. These cheques are addressed to the bank, state the exact EMI amount and are signed by you. These cheques cannot be processed ahead of date mentioned on them. 4. What is Disbursement? loan disbursement Disbursement means payment. It refers to the release of loan amount to borrower by lender. Usually, banks disburse the loan amount once all the submitted documents have been verified and the down payments have been paid. A loan is always disbursed by cheque, which can be credited into a loan account with the bank; it is never given by cash. Most banks charge a loan disbursement fee. It is added the principal amount when loan is granted. This fee covers all expenses involved in giving the loan to you. A loan can be disbursed in different ways, depending on your arrangement with the bank and its policies:

  • Full disbursement: A full disbursement means the entire amount is paid in one go. The bank hands over entire payment to seller on your behalf.
  • Partial disbursement: A partial disbursement means that the payment is made in stages. If you are buying an under construction property, then the bank will disburse payments as the construction progresses. For example, after completion of first floor, 20% of the payment will be made and so on.
  • Advance Disbursement: An advanced disbursement means that the entire payment is made before the completion of project. This is done only if the buyer request the bank to do so, or is convinced that builder will complete construction on time. However, its not a common practice.

5. What are Equated Monthly Installments (EMIs)?

EMI payments EMI is the repayment you make to your lender every month. It is an unequal combination of your principal repayment and interest payments. According to the thumb rule, EMI should not exceed more than 30% of your total income, considering other liabilities. To arrive at EMI, your bank will consider several parameters;

  • Principal amount
  • Repayment period
  • Rate of interest

EMI payments start once the loan has been fully disbursed. A break up of your EMIs over the entire loan term can be found in your amortization schedule. It’s important to go over your amortization schedule regularly to keep a track of any changes in interest rate or loan tenure made by the bank.

6. What is Pre-EMI?

When you buy property which is under construction, loan amount is partially disbursed to the builder. When a loan is partially disbursed, only interest payments are made on that amount. These interest payments are known as pre-EMI. So the longer your builder takes to complete construction, the more interest you pay to the bank, adding on to the cost of your property. Pre-EMIs too have tax benefits. After the construction is completed, you can claim tax deduction in five equal annual installments. However, any principal repayments made during this period are not liable for tax deductions. But this should not stop you from making repayments as it brings down your loan burden considerably.

Is paying full EMI a better option than pre-EMI?

Even though paying pre-EMI seems more lucrative in the short run, as you have to pay only the interest component, opting for full EMI payment is more beneficial in the long run. This way you start repaying principal amount even before you get possession, reducing total cost by reducing the tenure of home loan. For example, in the case of pre-EMI, if loan tenure is 20 years, and the builder takes 3 years to complete construction, you will actually end up making interest payments for 23 years.

 7. What is Resale Property?

ResaleProperty   When you buy property from someone who already owns it before, it is termed as resale. It indicates that you are not buying a new home straight from the builder and are not the first owner of that property. While buying resale property, make sure you have a record of all previous owners of property and the reseller has undisputed ownership. This will ensure smooth processing of loan application.

 

 

 

8. What is meant by Pre-approved property?

pre-approved property Now days, several builders get their projects pre-approved by lending institutions. A pre-approved property means that the concerned financial institute has verified all legal and technical documents of the project and has found them in order. So any buyer, who applies for a home loan for this property, need not get the legal verification done again. There are several misconceptions held by borrowers related to pre-approved properties, here are a few of them:

  • Getting a home loan is assured: Several builders misguide customers by assuring them home loans from the financial institute which has pre-approved their project. This is not true. Each application is assessed individually and there is no guarantee that home loan on pre-approved project will always be approved.
  • The project will complete on time: Though the financial institute takes into consideration, the builder’s past records and ability to complete projects on time, it doesn’t mean that it will take any action if construction is delayed
  • The project is legally safe: Though in most cases this holds true, sometimes, small banks  undermine several legal aspects and approve the project to get more business. So it’s always advisable to check which bank has pre-approved the project. A reputed bank is less likely to undermine such details which giving approval.
  • Less documentation is good:  Since the project has been pre-approved, the builder can directly share several documents with the bank, keeping you out of the loop. This way you are saved from the hassle of handling so many documents, but you will never get access to important documents related to the project.
  • You cannot take home loan from other lenders: This is not true! Just because the project has been pre-approved by a particular bank, it doesn’t mean you have to take the loan from them. The builder may try it’s best to convince you otherwise, but you are free to take a home loan from any lender of your choice.

9. What is Credit appraisal?

Credit appraisal is a check on the applicant’s financial situation to determine eligibility for home loan and the maximum loan amount. Credit worthiness of an applicant assures his repayment capacity. Several parameters are considered to confirm the credit worthiness of a loan applicant; credit appraisal

  • Incomes of the applicant and co-applicant
  • Age of applicants
  • Qualifications
  • Nature of profession
  • Employer
  • Security of tenure
  • Tax history
  • Assets owned and investments
  • Additional sources of income
  • Recurring liabilities

10. How is Pre-Payment of loan beneficial?

When a borrower chooses to make lump sum repayment of loan, it is termed as pre-payment. Pre-payments are beneficial as they help get rid of debt faster by reducing loan tenure.

11. What is Security in a loan?

home loan security Security is the asset provided by borrower while taking loan. In this case, the property being purchased serves as asset for home loan. If you fail to repay the loan due to certain circumstances, the bank can sell this property or convert it into an asset to recover loan amount. Therefore, before finalizing a loan, you must analyze the terms and conditions of various banks, and choose the one with favorable terms.

12. Processing & Administrative Fees

Every bank charges processing and administrative fees for processing the documentation of your home loan. On an average, the fee ranges from 0.5% to 2% of loan amount.  Though it seems like a small percentage, it can add considerable weight to your home loan costs. Several banks offer schemes wherein they waive off processing fee, to attract more customers. So while choosing a bank, it is advisable to opt for one which offers the lowest or no processing and administrative fees. For more information on home loan related terms, refer to; 3 Important Home Loan Terms Before You Switch! SwitchMe is an end-to-end service that helps you with everything related to your Home Loans! Signup for identifying the right lenders to figuring out the best tenure, interest rates or balance transfers. Also get one FREE call from one of our Advisors. Our customer, Mr. Girish Nambiar says “SwitchMe consultants are very proactive and responsive. They would listen to your challenges and provide creative ways to solve your problems. They are willing to go above and beyond to make their customers happy and they always stick to their commitment.”


Tarini

Tarini

Tarini comes with a degree in Mass Communication and Media studies. She joined SwitchME as a content writer and moved on to being an assistant product manager. Tarini is an experienced Content Strategist with a background in Product development and management. She is skilled in SEO, social media strategy and online content marketing and likes to travel when possible
381 COMMENTS

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  1. Aman
    Aug 28 2015 at 2:15 am
    Reply

    Hi There! Please advise if the EMI on the loan for Plot starts immediately after buying a Plot? or is there a loan option where the EMI starts after construction of the home on that Plot? Can you suggest some banks which provide such loans. Many Thanks…. Amanm

    • Tarini
      Tarini
      Sep 03 2015 at 4:34 pm

      Hey Aman

      Typically, any home loan has two repayment structures: paying full EMI, beginning from when the loan is disbursed and paying pre-EMI for a few years initially, after which full EMI payments start. Unfortunately, we haven’t come across any loan schemes which meet your requirements. I hope this helps.

  2. Arijit
    Aug 26 2015 at 4:53 pm
    Reply

    Hi Tarini,

    Thanks for this article. I have few query.
    I have booked an under constructed property in Bangalore worth 58 lakhs without registration cost. I have already paid 12 lakhs to builder and applied 42 lakhs loan from bank.
    Bank loan has been sanctioned where initial 24 month I have to pay pre-emi based on disbursement.
    As of now only foundation work has started, and currently I have money for first payment. My query is should I pay the amount to the builder as of now and ask bank to disburse from next payment or I should do FD for the amount and use it for later payment and let bank to disburse now as per the construction. Which will be economically benefited?
    My second query is that, I heard somewhere that if possession of the under constructed flat takes more than 3 financial year from the starting of the bank sanction year, then we can not claim tax benefit for the interest amount paid till possession. Suppose my loan got sanctioned in August 2015 but I got possession after August 2018, can I claim the interest amount till that period after possession for next 5 financial year? don’t know what is the actual rules for tax exemption.

    • Tarini
      Tarini
      Aug 27 2015 at 4:14 pm

      Hey Arijit

      Here’s a response to all your queries:
      1. Irrespective of whether you’re paying full EMI’s or partial EMI’s, its best if you let the bank make all the payments to builder and save the money that you have. by doing so, you’ll be keeping some liquidity in hand in case the project exceeds its completion date or other unexpected financial expenses arise.
      2. as per Income Tax section 80C, if the construction of a property doesn’t complete within 3 years of taking the home loan, then the ceiling of Rs. 2 lakhs in IT deductions gets reduced to Rs. 30,000. So you will be able to claim IT deductions on the interest amount for the next financial year, for this period, up to a limit of Rs. 30k.

      I hope this helps 🙂

    • Arijit
      Aug 27 2015 at 4:28 pm

      Hi Tarini,

      Thanks for your reply. For the 2nd answer you mean to say, if property completion takes more than 3 years after taking home loan, the reduced interest limit of 30k applicable for only one year on which property will be handover, From next financial year onwards I can claim home loan interest upto 2lakhs for tax exemption if applicable. Or I never able to claim more than 30k from this loan for the following years also?
      And 3 years means exactly 3 years or 3 financial yr. Suppose I take home loan now to 3 year will be till August 2018 or March 2018?

      Regards

    • Tarini
      Tarini
      Aug 28 2015 at 1:22 pm

      Hey Arijit

      You’re welcome. The reduced interest limit will be applicable only until you get possession of property, after that you will be able to claim IT deductions of up to 2 lakhs. Further, by saying 3 years, it means 3 years from the date of taking the home loan. I hope this helps 🙂

  3. Shakti Mehrotra
    Aug 26 2015 at 9:51 am
    Reply

    Hi Tarini,
    I purchased a under construction flat in resale in faridabad and made all the payments to the first party by own. Now I get the possesion letter for Rs. 5,75,000 two months back to get the final handover so i involved Aditya Birla home finance and availed home loan from them for this amount. Also i ask bank to fund flat registraion and stamp duty and they agree to pay additional 2,45,000 for the registry process. Now i have two questions actually.
    1. First, Builder is asking me that if you want to save cost on stamp duty and registry, then we will remove first buyer from our side and make fresh agreement between builder and you. This will allow you to register your flat on cost at the time of booking (Rs. 1350) not on the current circle rate (Rs.3700) defined by governement. What is your opinion in the subject?
    2. What is the post procedures after registration? Will bank take my registry, sale deed and other documents? Will they give some confirmation or acknowledgement for all of this submission on letter head on bank? Why i am concern here is because 15-20 years in long period and people change in everywhere so how I or even they, can refund the entire documents? Kindly elaborate this little.

    Regards
    Shakti

    • Tarini
      Tarini
      Sep 03 2015 at 4:50 pm

      Hey shakti

      Here’s a clarification to your queries:
      1. There’s nothing to worry about as its a common practice by lending institutions and builders, in the end this will benefits you, so I suggest you go ahead.
      2. Yes, the bank will take possession of all your original property documents until the home loan has been repaid in full. For this, most lending institutes either give a complete list of documents (LOD) in their possession to the borrowers, or give you one on request and charge a small fee for it. Since this is a matter of internal policy, I will not be able to give you a definite answer, kindly check with your bank regarding the same.
      Further, I believe there is nothing to worry about as this is a standard practice across all banks around the world 🙂
      I hope this helps!

  4. ARUN kUMAR
    Aug 24 2015 at 3:01 pm
    Reply

    Hi Tarini

    very nice article, I have get home loan and disbursal from SCB by last month. Now i have sold out my another property and wants to total closed/return/cancel my loan before paying 1 EMI. Request you to guide me if its possible life insurance police within 45 days.

    Regards
    Arun Kumar

    • Tarini
      Tarini
      Aug 25 2015 at 2:11 pm

      Hey Arun

      1. Since your loan has already been disbursed, I am afraid the only way to close it is by repaying the entire loan amount (as is the standard operating procedure). However, I’d advise you to talk and negotiate with your bank, to cancel the home loan, considering this as a special case.
      2. Regarding your life insurance reference, I am not sure what the query is, could you please elaborate? This will help me answer your query better.

  5. Jignesh Shah
    Aug 20 2015 at 5:41 pm
    Reply

    Hi,
    I want an expert opinion. I have bought property of 150L (agreement value) and paid 30L. Payment is in installements (construction linked as it is under construction). Balance is 120L. Bank Sanction is of 80L of home loan. That means I have to have self-contribution of 40L to knock-off 120L. Now can i have option of having each installment wherein I put some contribution and bank puts some contribution. For eg, If installment is of 12L say, then I would put 4L and bank will give home-loan of 8L for that installment and such 10 installments will be done? Is it possible? How?
    Thanks

    • Tarini
      Tarini
      Aug 25 2015 at 2:23 pm

      Hey Jignesh

      It’ll be best if you could discuss the possibility of such an arrangement with your bank, since all banks have different rules and regulations 🙂 As per my knowledge, such an arrangement may not be possible. what you can do instead is, make a bulk prepayment at once, which will reduce your outstanding principal amount. So if the bank disburses 12 lakhs, you can prepay 4 lakhs along with your next EMI, reducing the outstanding loan amount to 8 lakhs. In such a scenario, you will need to confirm if your bank has any limits on the number of prepayments a borrower can make over the entire loan tenure.
      I hope this helps 🙂

  6. Vijay
    Aug 19 2015 at 3:26 pm
    Reply

    Hello Tarani

    Very nice article. I’m planning to buy an under construction apartment in Bangalore. Posession will be in December 2015. The property is pre approved by major all Banks (HDFC, PNB, SBI). I have submitted the documents for the loan approval with HDFC. My friend suggest me to get a legal opinion from the private lawyer. Is it mandatory for the pre-approved projects.

    Kindly advice.

    • Tarini
      Tarini
      Aug 19 2015 at 7:17 pm

      Hey Vijay

      Thank you for the appreciation 🙂 In what regard are you looking to take legal opinion from a private lawyer? Specifying the purpose will make it easier for me to answer your query.

    • Vijay
      Aug 20 2015 at 2:48 pm

      Thank you for your response.
      This is the first time I’m buying the property. I do not have any idea what documents to refer. I’m collecting the information from my friends, colleague and searching the online. One of my friends told, take the document copies to the private advocate and verify all the documents are correct and confirm there is no problem in the land. I’m not sure is it mandatory as the Banks are already approved the project. Also, the construction is almost over. Hope the information is clear. Kindly advice.

      Vijay

    • Tarini
      Tarini
      Aug 25 2015 at 1:56 pm

      Hey Vijay

      As far as documents are concerned, once you apply for a loan, the bank will give you a list of documents (LOD) that they require to process your home loan. This list will differ from bank to bank as all banks have different requirements. Further, since the bank has already approved the project, it means that they have done their verification process, most banks may repeat this due diligence while giving the home loan again. So I believe there is no urgent need to get papers and land verified by a private advocate. While processing the loan, banks will charge you advocate fees anyways, for the same purpose. I hope this helps 🙂

  7. Balakrishna Reddy G
    Aug 18 2015 at 5:40 pm
    Reply

    Hi,

    If I paid the Part payment of my brother home loan by selling my own property where I was not involved in any kind in the loan, should I still pay income Tax on the Income earned from selling the property or any other way out?

    • Tarini
      Tarini
      Aug 25 2015 at 7:29 pm

      Hey Balakrishna

      From the perspective of income tax, the two are different transactions;
      1. You have sold your house: So irrespective of what you did with the income from sale of property, you will have to pay tax on it
      2. You have helped your brother prepay his home loan: since you are not officially involved in this loan in any way, you will not be able to claim IT benefits for payments made towards home loan in any way.
      I hope this helps 🙂

  8. Ganesh
    Aug 13 2015 at 11:20 am
    Reply

    Hello Tarini,
    After i receive loan sanction letter from bank(IOB) how much time i have got to do registration of the property. I need 6 months time to arrange for registration cost. is it possible? or bank will force me to do registration with in 2 or 3 months?

    • Tarini
      Tarini
      Aug 13 2015 at 1:58 pm

      Hey Ganesh

      You will need to register the property before the bank disburses the loan amount. As a standard operating procedure, banks lend only to borrowers with registered properties, this helps ascertain your ownership. Typically, a sanction letter is valid for 6 months, after which you will have to apply for loan again. So it’s advisable to get you property registered within this time frame, to save yourself the hassle of paying for home loan again.
      I hope this helps 🙂

  9. Kaushik Jain
    Aug 11 2015 at 8:39 am
    Reply

    I recently applied for a home loan from a Nationalised bank from India and I received the cheque of the entire sanctioned amount on 27th of July. But being a salaried employee I prefer to have the EMI date to be 5th or 7th of every month. Can this be done? Please note that I haven’t even paid the first EMI. Any help would be appreciated. Thanks in advance

    • Tarini
      Tarini
      Aug 11 2015 at 4:49 pm

      Hey Kaushik

      To change the date of EMI payment, you can put in a letter of request in your bank, they should be able to help you out 🙂

  10. Ganesh
    Aug 10 2015 at 8:56 pm
    Reply

    Hi Tarini….I have identified a property and have agreed to purchase it for 18.5 lakhs. I approached HDFC bank and they have pre approved a loan of 13.5 lakhs and rest 5 has to be paid by me. I have already paid the seller the require 5 lakhs by the way of cheque…Now I will be getting the Documents verified by the Bank…I checked with the local vendors near the Registrar Office, they calculated the property value to be around 1729200 Lakhs….Now my question is while registering, for how much value will the property be reflected? Will there be any issues in Bank providing 13.5 lakhs? The loan approved is a pre approved one. Will the Bank send their representatives to check the property that I have identified? Will they reduce the loan further??

    • Tarini
      Tarini
      Aug 11 2015 at 5:07 pm

      Hey Ganesh

      Generally, there is always a slight difference between the market price calculated by registrar’s office and the actual selling price, with the latter being more than the former. So in all cases, banks consider the amount you are purchasing the property for, to calculate the percentage of loan amount they can lend (typically that’s 80% of the property value). So there is no need to worry, bank will not reduce the loan amount, they only way this will actually end up benefiting you is that you will have to pay stamp duty on the lower property value instead of the actual purchase price 🙂

  11. Kashish Grover
    Aug 08 2015 at 12:26 am
    Reply

    Hi Team,i am closing my Auto loan 6 months before the tenure period.So am i liable to pay the interest for the last 6 months as well??
    Revert Asap.
    Regards

    • Tarini
      Tarini
      Aug 10 2015 at 11:49 am

      Hey Kashish

      No, you need to pay interest only for the period before the date of prepayment. There is no need to pay for the full tenure of loan.

  12. Shanu
    Aug 03 2015 at 7:58 pm
    Reply

    Hello

    Thanks to post such type of articles which is very helpful to us those who are not aware about policies. I have also a query that I have applied for home loan i.e. 25 Lakhs in Central Bank of India just two days ago. I have confirmed from bank authorities but their reply did not seem to me satisfactorily that if I will pay suppose 5 lakhs rupees in the next year other than EMI’s then would it be deduct from Principal amount or from interest amount. Bank authorities said that it will divide in the 60(Principal) :40(Interest) ratio.

    Please guide me..

    • Tarini
      Tarini
      Aug 04 2015 at 3:02 pm

      Hey Shanu

      Though I am not aware of the internal policies of Central Bank of India, its a standard practice across all banks and lending institutions to treat and pre-payments as reduction in outstanding loan amount. This doesn’t get divided between principal and interest. It’ll be best if you could check with your bank again as there seems to be a misunderstanding. Do feel free to get in touch with us in case of any further queries.

  13. prasad
    Jul 24 2015 at 11:57 am
    Reply

    Hi tarini,

    I have a question :

    I have an approved loan of 80lakhs from SBI, but the first demand from builder is for 70 lakhs. I remember signing a document at SBI saying my EMI would be 76k ( which is 9.7% on 80 lakhs). My question is what would be my first EMI? I expect it to be lesser than 76k as the bank would have given only 70lakhs to builder. Could you please help?

    • Tarini
      Tarini
      Aug 05 2015 at 2:35 pm

      Hey Prasad

      Usually, in the case of under construction properties, the loan is disbursed in installments. The EMI is also calculated based on the amount disbursed. So with each installment, your EMI will change (increase). This should apply to your case as well, so I would suggest you ask your bank about on what basis will they calculate the EMI on 🙂

  14. Rajesh
    Jul 23 2015 at 10:30 am
    Reply

    hi tarini

    pl guide me.I hv bought an under construction property at kundli haryana in name of myself & my mother as first owner total cost is around 40 lac.we both paid around 90 % of cost of the flat by own resources .Rs.21 lac of the paid cost( Rs.34 lacs ) has been paid by my mother.

    My query are as follows :

    – I want to buy out my mother’s share in this flat for Rs.24 Lac.If I am eligible for home loan.

    – either any bank give me a home loan?

    – if yes ,which bank will give me best loan deal?

    Pl give the reply

    Thanks in advance – Rajesh

    • Tarini
      Tarini
      Jul 23 2015 at 12:48 pm

      Hey Rajesh

      Here’s a clarification to all your queries:
      1. There is no need to buy out your mother’s share of the property, you will still be able to service the home loan all by yourself, as you will be the second co-applicant of loan. You will be able to get 100% tax benefit on all your payments too.
      2. As every bank/ lending institution has their own eligibility criteria, it’ll be difficult to give you a list of banks that you can borrow from, as I am unaware of your financial status. I would suggest that you look at taking a home loan from a PSU bank (government undertaking) rather than a lending institution as banks offer lower and more stable interest rates throughout the loan tenure.

      I hope this helps 🙂

    • Rajesh
      Jul 23 2015 at 5:37 pm

      Thanks for the reply Tarini,

  15. Teetu
    Jul 13 2015 at 3:58 pm
    Reply

    Hi Tarini,

    Thanks for this article. I have been reading through your suggestions/comments and am really enlightened and impressed. Could you please guide if there are any pros/cons for deciding the EMI date.

    My home loan is under process. Approved, but yet to be disbursed. The bank has given options for 5, 15 or 25th of a month to be fixed as the EMI date. If I have an option to fix the disbursement date (the seller is supportive to adjust for 10-15 days), when shall I take the disbursement (beginning of month or towards end of month) and what EMI date shall I choose? I can afford to pay on any day of the month.

    • Tarini
      Tarini
      Jul 23 2015 at 1:42 pm

      Hey Teetu

      Thank you for the kind words 🙂
      There are no consequences of deciding EMI date. You can pick any date you like, as per your convenience.

  16. Anand
    Jul 07 2015 at 6:04 pm
    Reply

    Queries:

    1) Can Pre Emi period disbursal payment be prepaid? If this is Bank specific then for HDFC & ICICI?

    2) If one get a loan approval today of say 50L for an under construction residential project that would be completed in 3.5-4 years. The disbursement would be as per slabs dependent on construction. No can one say get the bank to disburse a Pre Emi period payment of say 10% for a certain slab amounting to say 6L and then a couple of months later pay it all off to the back? Does the loan continue though there are no real dues to the back and can one then again get the back to pay for the next slab only to again fully prepay when one has sufficient pay. Essentially can one prepay entire amounts of loan multiple times during the loan for a single apartment?

    The reason for the queries is that a project may be such that it can be entirely self financed (Almost – but maybe not fully) dependent on cash flows and expenses.

    • Tarini
      Tarini
      Aug 12 2015 at 7:10 pm

      Hey Anand

      Here’s a clarification to queries:
      1. No, you cannot prepay your home loan during the pre-EMI period. Prepayments are allowed only when you start paying full EMIs. This applies to all banks and lending institutions.
      2. Depending on different banks and lending institutes, prepayment of home loan is allowed only for a few times during the entire loan tenure. Do check with your bank before taking the home loan.
      I hope this helps, do feel free to get in touch with us in case of further queries 🙂

  17. Pazhaniappan R
    Jul 06 2015 at 6:42 pm
    Reply

    Hi madam,

    I plan to take home loan in canara bank i submitted applications and necessary documents. unfortunately now i plan to cancel and withdraw my application. while contacting bank for withdrawal. They replayed we are already processed and Home loan was sanctioned if you need to withdraw my loan, you need to pay processing fees and verification fees. Is it true ? kindly help me from critical situation.

    • Tarini
      Tarini
      Jul 07 2015 at 12:12 pm

      Hey Pazhaniappan R

      Unfortunately, you will have to pay processing fees and verification fees as once you submit your application and documents, the bank starts processing the loan. So even is if you want to cancel the application now, you will have to pay the fees.

  18. Abhijeet
    Jul 06 2015 at 1:10 pm
    Reply

    Hi,

    I wish to transfer a loan of a under construction property from HDFC to SBI. I have already take 50% of disbursement from HDFC. The loan was taken in Dec’13. Before moving ahead with the transfer I wish to know will there be any hurdles from HDFC bank regarding the transfer. Can a bank reject a transfer of loan? Will there be any pre-closure charges from HDFC? Will they refuse to share the original documents which I have submitted with HDFC?

    • Tarini
      Tarini
      Jul 07 2015 at 12:24 pm

      Hey Abhijeet

      Here’s a clarification to all your queries:
      1. Since your loan has been partially disbursed, HDFC may ask you to wait until the full loan has been disbursed, to switch your home loan.
      2. Yes, if the bank you choose to switch to finds that there are some discrepancies in your loan transfer application, then they may reject the case.
      3. No, if your home loan is on a floating interest rate at the time of switching, then HDFC cannot ask you to pay any pre-closure charges.
      4. No, none of the banks or lending institutions have a right to refuse a borrower access to their original documents. However, you will have to pay a nominal fees of Rs. 562 (could be different in case of HDFC) to obtain them.

      I hope this helps. Our Relationship Manager will get in touch with you shortly to guide you further 🙂

  19. srijith nair
    Jun 27 2015 at 8:47 pm
    Reply

    Hi Tarini
    I had transferred my housing loan from GIC to TATA Capital. I had applied for top up loan also at TATA Capital. Tata Capital has informed me now that the top-up cheque will be handed over to me only after vetting the documents received from GIC. The cheque is dated 8th June and I am expected to pay the emi from 8th June but I have not yet received the cheque. Is this a fair practice? Its like paying emi for the amount I have not yet recieved.

  20. soumit chowdhury
    Jun 27 2015 at 7:10 pm
    Reply

    i have received a house building loan and now it is going to continue re-payment smoothly from my savings account. now i want to sale a partial property (soap) ant wanted to payment the remaining loan amount by the emi. how can i do that ?

    • Tarini
      Tarini
      Jul 22 2015 at 5:20 pm

      Hey Soumit

      I apologize for the delay in response to your query. At SwitchMe we understand that financial matters are of an urgent nature and need immediate attention. Please find a response to your query below:
      As per my knowledge, you cannot sell a part of your property without taking permission from the bank (as technically until you repay full loan, the property belongs to bank). So you will need to consult with the bank about the entire procedure and repayment options and schedule.

  21. Haresh
    Jun 26 2015 at 7:03 pm
    Reply

    Hi Madam Tarini,
    I want to purchase flat. Property (sell) price is 25 L. I need loan only for 10 L. Rest of the amount will be pay by me to seller. Kindly advice whether I can demand loan from ICICI Bank or Bank of Baroda (which is good option out of two). My repayment capacity is already judged.

    • Tarini
      Tarini
      Jun 30 2015 at 1:05 pm

      Hi Haresh

      It’s difficult to advise the best bank for you as I am unaware of your financial background. So the best I can do is give you an idea of the cheapest bank based on the interest rate charged by each at present:
      ICICI bank: 9.90% for salaried individuals
      Bank of Baroda: 10% for salaried individuals
      Since ICICI has a trend of offering lower interest rates than Bank of Baroda, it seems like a better option. However, the stability and financial safety provided by a PSU Bank is unmatched by any private bank.

      I hope it helps.

  22. Shrikant
    Jun 25 2015 at 6:16 pm
    Reply

    Hi Tarini,

    Willing to buy a property in Ambernath, have made down payment to developer as per the scheduled payments (i.e. 20%); on booking developed communicated that agreement cost would be included in the loan and after making the down payment he is saying us to pay the agreement cost because it will not be included in the loan as per new RBI norms. My question is that is this can be covered in the loan or not is anything declared by RBI

    • Tarini
      Tarini
      Jun 30 2015 at 1:18 pm

      Hey Shrikant

      Are you borrowing from a financial institution or a bank? This change holds true only for NHB regulated financial institutions. For more information, read here.

  23. Nanjundesha
    Jun 23 2015 at 4:24 pm
    Reply

    Hi,
    I am decided to take plot by loan. The owner is already holding loan & original documents are with bank. Before sanctioning the loan or registration in my name, my bank will ask original documents. How to handle this situation or how to clear his bank loan.

    Thanks
    Nanjundesha

    • Tarini
      Tarini
      Jul 28 2015 at 6:44 pm

      Hey Nanjudesha

      To tackle such cache 22 situations, banks usually set up a meeting where officials from both banks take care of the transfer of original property documents and settling the loan amount. I would advise you to discuss the further course of action with your bank.

  24. varun
    Jun 21 2015 at 1:03 am
    Reply

    hi one of my friend(A Girl) got alloted DDA flat in Delhi. they alredy have paid security deposit of rs 1 lacs.but right now as my friend is job less and his father is a building contractor doing his small business with small contract. they need of HL of Rs 12 to 13 lacs. they are capable of paying EMI but as his father has never filled a ITR so banks are denying to give HL…what should they do?

    • Tarini
      Tarini
      Jul 23 2015 at 3:19 pm

      Hey Varun

      This is a tricky situation as ITR is a important document demanded by most banks. The next best option you have in this case is to apply to lending institutions like DHFL, LIC, GIC, Tata Capital, HDFC etc. Lending institutes aren’t as stringent about documents as banks, this may improve their chances of getting a home loan.

  25. prem
    Jun 17 2015 at 1:42 pm
    Reply

    Hello ,

    I have got loan approval from HDFC bank for 40lakhs. But i am in catch 22 situation right now.
    My builder has pre-approved by BOI bank.
    We have submitted all the documents to HDFC. Now HDFC is asking for NOC & Charge release letter from BOI. Is this legal requirement ?

    we contacted BOI , they are not ready to give noc. are they allowed to deny the request ?

    Is it responsibility of Builder to provide noc from the BOI bank ?

    appreciate your help.

    Thanks,
    Prem

    • Tarini
      Tarini
      Jun 17 2015 at 6:11 pm

      Hey Prem

      This is strange, as in your case HDFC should have nothing to do with BOI. Even if the project has been pre-approved by BOI, buyer has a right to borrow from a bank of their choice. The pre-approval of project by BOI should in no way affect your dealings with HDFC as they will have their own standards of approving a property for loan, so I don’t see why they would need an NOC from BOI.

    • prem
      Jun 18 2015 at 4:52 pm

      Hi Tarini,

      Thank you for the response. It is so frustrating to get stuck with this after all the procedure to get the approval.

      HDFC sent the requirement of this document in a mail also. Will go and check with them about the legality of this requirement.

      Thanks so much.

      Prem

    • Tarini
      Tarini
      Jun 18 2015 at 5:06 pm

      Hey Prem
      I can understand the gravity of the situation you have been put in. I hope it all works out for at the earliest. Do feel free to contact us for further guidance and support 🙂

  26. Pankaj
    Jun 16 2015 at 4:39 pm
    Reply

    Hi,

    I have a loan of 30 lakhs for an under construction flat. 80% payment has been disbursed by the bank and around 20% is pending. Now I want to prepay all of the disbursed amount to bank to stop my EMI. But Bank is saying that will close my loan account and at the time of remaining 20% disbursement, I have to again go for loan approval process. Is it true ? Now because project is delayed, I don’t know when remaining amount will be requested by builders. So to avoid this hassle, should I keep some amount in bank and keep paying the EMI.

    Please advise.

    Thanks
    Pankaj

    • Tarini
      Tarini
      Jun 16 2015 at 8:26 pm

      Hi Pankaj

      This is indeed a tricky situation. Although it is unusual for a bank to do so, it’s hard for me to say if its a legit practice as every bank has their own set of policies and procedures. The best advice I could give in this situation is to do a cost benefit analysis of loan processing fee (that you will have to pay for extra 20%, if you close your loan now) and the EMIs you will have to pay on the disbursed amount (for an uncertain time period). This also depends on how much further delay is expected in completion of the project.
      Do consider these 3 points before you decide, hope this helps 🙂

  27. unknown
    Jun 08 2015 at 12:14 pm
    Reply

    He Madam, If we buy the the plot then is it mandatory to start the construction within 2 years? if not what banks will do?

    • Tarini
      Tarini
      Jun 16 2015 at 9:02 pm

      Hey there
      If the loan agreement specifies that construction needs to start within 2 years of disbursement, then on failing to do so, the bank can levy a penalty on you for not upholding the terms of loan disbursal.

  28. Mohammad
    May 23 2015 at 8:38 pm
    Reply

    Hi,

    I am planning to book a flat in a under construction property via loan from SBI bank. The registration, stamp duty, service tax, VAT and legal charges adds up to 2.85 Lacs. Can the registration of the flat be done at the time of possession? As it will save some money for now, and i can adjust that money to reduce the amount that i borrow from bank by 2.85 Lacs. Please advise. Also in terms of interest paid to the bank, if i go for a loan tenure of 15 years instead of 10 years (to add flexibility) and re-pay the amount in 5 years, what difference does it make in the total interest paid? Thank you and nice blog!,

    • Tarini
      Tarini
      Aug 13 2015 at 1:54 pm

      Hey Mohammad

      Thank you for the appreciation 🙂 Regarding your query;
      1. As per regulations, property needs to be registered before you take a home loan. Otherwise bank will not be able to ascertain your ownership of the property.
      2. So if you are planning to repay the loan within 5 years in both the cases, then actual loan tenure will not affect the total interest paid by you in any way. If not, longer the loan tenure, higher will be the total interest rate that you will end up paying.
      I hope this helps 🙂

  29. Rajesh Kashyap
    May 22 2015 at 8:47 pm
    Reply

    I applied for home loan and HDFC home loan councellor collected documents from me on the pretext that it will be done within a week or two.Now he informed me through E Mail that i will get no loan and he is returning my document through courier.However no courier is received and nor he is responding on phone. What to do? Can my documents be misused?

    • Priyanka
      May 25 2015 at 3:06 pm

      Hi Rajesh,

      The documents wont be misused and if you want a loan, then we can help you with it.

      http://www.SwitchMe.in
      91-810889980

  30. kuldeep bhivsane
    May 22 2015 at 3:01 am
    Reply

    i have apply for home loan. bank has varrified my all documents and given me sanction latter of 19.5 lak, but when the time has come for disbursement , the bank has refused the santoin amount and and says that valuation is not getting more than 18 lak. whate wiil i do? I have paid all related fees. some down peymentalso

    • Tarini
      Tarini
      Aug 12 2015 at 7:40 pm

      Hey Kuldeep

      Though uncommon, a few banks/ lending institutions do this sometimes. In such situations the borrower has an option of either taking the reduced sanction amount, or can apply to another bank. What I don’t understand here is that if your loan hasn’t been disbursed, then why did you pay a down payment? could you please elaborate on that? This will help us understand your situation and guide you better.

  31. May
    May 20 2015 at 8:14 pm
    Reply

    I am planning to buy an under construction property with agreement value of around 85 Lakhs.
    I want to take a loan of 55 Lakhs for this, and arrange 30 Lakhs by myself. I want the arrangement with the bank to be like this.

    1. I pay the initial 20 Lakhs by myself ( Down payment of 25% as asked by builder). Then I want the Bank to disburse the amounts as per construction status. The last few Disbursements (Amounting to 10 Lakhs), I plan to do myself, since I am planning to save 10 lakhs within the next year. Can this be arranged with the bank ?

    2. Also , since its an under construction property, do i have to pay Pre-Emi or can I opt to pay the full EMI right from the first month ?

    Please advise.

    • Tarini
      Tarini
      Oct 08 2015 at 6:56 pm

      Hey May

      Here’s a clarification to all your queries:
      1. Please check with your bank regarding this, they will be able to guide you best in this regard.
      2. You can choose either payment method depending on what’s convenient, there’s no compulsion to pay pre – EMI.
      I hope this helps 🙂

  32. rajan
    May 19 2015 at 12:12 am
    Reply

    Hello Mam,

    1. i HAVE BOUGHT TWO HOUSES IN NOIDA.

    2. Kindly inform how can i reap max tax benefits out of the same.
    (A) First house @ 29Lac at 9% PA fixed
    (b) Second house @32.5Lac at 10.15% floating

    • Tarini
      Tarini
      Jun 10 2015 at 5:06 pm

      Hey Rajan

      On both the loans, you can claim tax deductions of up to 2 lakhs under section 24 and up to 1.5 lakhs under section 80C, on each home loan. This will amount to a collective saving of 7 lakhs on both home loans per year. Kindly refer to this article for more information : http://switchme.in/blog/2014/01/home-loan-tax-benefits-save-money/

    • rajan
      Jun 17 2015 at 11:09 pm

      Hello Tarini

      1. Thanks a lot for your prompt reply and friendly guidance. The link you suggested gave sufficiently solved my doubts.

      2. Further to this,refer to the article in below link
      http://articles.economictimes.indiatimes.com/2012-04-23/personal-finance/31386956_1_deductions-home-loans-second-house

      3. It says “In case the house is yet to be constructed, 20% of the total interest paid during the preconstruction period is also allowed as tax deduction. This is available for five years from the time the construction is complete till you get possession.” This statement probably pertains to how to claim pre-emi paid on CLP plan taken.

      4. Kindly tell can we claim Pre-EMI before possession of the house and procedure for the same.Like for my case, Possession of my house is in Dec 2016 and till date i hve paid Rs 130000 as pre emi since 2014.

    • Tarini
      Tarini
      Jun 18 2015 at 4:47 pm

      Hey Rajan
      We are happy to help 🙂
      3. Yes, that’s right. But since your house is already under-construction, this doesn’t apply to you.
      4. No, you will not be able to claim any tax benefit before completion of construction. You can claim tax deductions on all your payments in 5 equal installments over the next 5 years, from the date of completion of construction.

    • rajan
      Jun 09 2016 at 2:33 pm

      Hi Tarani, It would be kind if you can guide me on following

      1. I have bought a second house which is under construction and likely possession date in mar 2017. My EMI for this house has already started.
      2. MY first house is also under construction and likely possession date is dec 2016. I am paying pre-emi for this house and EMI shall start only after possession.
      3. Can i claim pre emi/Pre construction interests paid by me on both houses together in next year IT return or is it applicable only on one house.

    • Tarini
      Tarini
      Jun 16 2016 at 4:16 pm

      Hey Rajan

      You can go ahead and claim deductions on interest payments on both the home loans, under section 24 up to an upper limit of Rs. 2 lakhs 🙂

  33. Dr K K Misra
    May 14 2015 at 10:08 am
    Reply

    hello, I have taken loan from bank of baroda in which only 5 lakh is only disbursed but the bank is charging emi for the approved loan amount of 37 lakh for 70 months emi . I want to take only 25 lakhs more from the aproved amount. the bank says the emi cannot be changeg even if I take lonly 25 lakhs from the approved amount. kind;ly help how to resolve this problem. I wanted only 30 lakhs in total and the bank did not ask me about approving loan amount and they sanctioned it on their own. kindly help me in this regard.

    1. the bank is charging emi of 72000 for 37 lakhs but the amount disbursed is 5 lakhs.
    2. out of the total approved amount of 37 lakhs i just need 30 lakhs.
    3. my builder has assured me the possesion will be ready in aprox 1 year.

    • Priyanka
      May 14 2015 at 1:51 pm

      Hi Mr.Misra,

      Try having a word with your bank, probably they can help you out.

      http://www.switchme.in
      91-8108899980

  34. Dr K K Misra
    May 14 2015 at 9:42 am
    Reply

    hi,
    I have taken home loan of amount 37 lakhs from bank of baroda. my monthly emi stated is 72000 . the bank did not ask me how much amount I needed and they sanctioned the amount by calculatiny from my salary. my query is , is it possible to change the loan amount to 30 lakhs so that I will have to pay for less emi because emi for 37 lakhs is too high. kindly guide me in this regard.

    • Tarini
      Tarini
      Aug 12 2015 at 7:43 pm

      Hi Dr. Mishra

      Yes, you can tell the bank that you need a home loan for a lower amount. A sanction letter id only indicative of the fact that the bank is willing to give you a home loan of the specified amount. It’s not binding on the applicant to take that loan. You can ask them to disburse a loan of a lesser amount.

  35. varsha
    May 13 2015 at 2:08 pm
    Reply

    Hi, I have taken home loan of 35 lacs from can fin at 11.10%. Please tell me what documents are provided by the bank when we ask for list of documents. And also the procedure to switch loan to another bank at lower interest. Thanks.

    • Priyanka
      May 14 2015 at 2:01 pm

      Hi Varsha,

      We can ofcourse guide you through. Can you please share your Contact details?

      http://www.switchme.in
      91-8108899980

  36. Reyan
    May 08 2015 at 11:49 am
    Reply

    There is no doubt that most of the people don’t know that which way get best home loan and what’s the term & condition of it.But I am fully confident that if they are read your post then they will definitely get best home loan.

    Home loan India

  37. Priyanka
    May 06 2015 at 6:52 pm
    Reply

    Hi Vijay,
    The normal EMI range would be 17 – 18k but it depends on the loan tenure.
    http://www.SwitchMe.in
    +91-8108899980

  38. Arnab Majumdar
    May 04 2015 at 5:37 pm
    Reply

    I want to apply for a Loan for home. Does the 80% value which I can avail maximum fro bank as loan includes the registration fees which will require at the time of property registration? Means,

    for say, property value – 4000000
    Registration value – 4000000*8.1% = 324000
    Total Cost = 4000000+ 324000 = 4324000
    Bank loan I can avail (Max) = 4324000*80% = 3459200 OR it will only consider 80% of property value i.e. – 4000000*80% = 3200000..

    I am planning to take loan from LIC HFL and knew that it includes the registration/stump duty fees in property cost and give 80% of total value i.e. 3459200 (in my above calculation) but now a days they are not. Is this correct?

    Can somebody please make me clear here!!

    • Priyanka
      May 06 2015 at 6:49 pm

      Hi Arnab,
      Stamp Duty Fees & Registration are not included in the property cost, you need to get it done from LIC. Hope this helps.
      http://www.SwitchMe.in
      +91-8108899980

  39. Arnab Majumdar
    May 04 2015 at 4:18 pm
    Reply

    I want to apply for a Loan for home. Does the 80% value which I can avail maximum fro bank as loan includes the registration fees which will require at the time of property registration? Means,

    for say, property value – 4000000
    Registration value – 4000000*8.1% = 324000
    Total Cost = 4000000+ 324000 = 4324000
    Bank loan I can avail (Max) = 4324000*80% = 3459200 OR it will only consider 80% of property value i.e. – 4000000*80% = 3200000..

    Can somebody please make me clear here!!

    • Tarini
      Tarini
      Aug 13 2015 at 1:07 pm

      Hey Arnab

      As per RBI regulations, 80% of the the value means 80% of the property value, this doesn’t include other charges like stamp duty, registration, renovation etc. However, depending on your eligibility, banks may be inclined to give a loan to cover the above metioned costs. This purely depends on the lender and differs from case to case.
      I hope this helps 🙂

  40. Debaraj Mukherjee
    Apr 28 2015 at 11:14 am
    Reply

    Hi Tarini,
    I have applied for HL of Rs 34 L from SBI for an under construction housing complex. The total amount of the project is 45.15L and i have paid almost 7L (15%) while signing the agreement with builder. I would like to know from you whether I have to pay the shortcoming of 4L to SBI before disbursement or keep it on hold until possession. Thanking you in anticipation

    • Tarini
      Tarini
      Aug 12 2015 at 7:49 pm

      Hey Debraj

      Generally the borrower – bank – builder draw up an understanding among themselves about when does the borrower pay the remaining amount, I suggest you do the same 🙂

  41. Manish Narula
    Apr 26 2015 at 12:10 am
    Reply

    I am paying EMI (p+I) for a under construction property. EMI falls on every 10 th day of months. If I take new disbursal on 31st, what shall be my EMI on 10th day of subsequent month.

    • Priyanka
      Apr 27 2015 at 5:36 pm

      Hi Manish,
      It depends on the loan amount. Can you please share a few details with us through email to ops@switchme.in. We will help you out.

      Regards,
      http://www.switchme.in

  42. Salman S
    Apr 25 2015 at 1:34 pm
    Reply

    hi Tarini

    I am a reseller. the borrower has given the letter which i suppose is a offer letter and now suggests me to do the registration. i want to know is that correct ?.what is the actual procedure to ensure nothing is wrong?

    • Priyanka
      Apr 27 2015 at 5:43 pm

      Hi Salman,
      We need more information than which you have provided here. Please email us at ops@switchme.in or call us on +91-8108899980.

      Regards,
      http://www.switchme.in

  43. abhijit
    Apr 22 2015 at 2:56 pm
    Reply

    Hi Tarini,

    I have applied for the loan, for a resale flat my loan has been sanctioned also but the rest 20% amount which i have to pay is being paid by my father.

    So If he pays it directly from his account to the builder (owner). Shall there be any problem for my loan ????

    • Priyanka
      Apr 23 2015 at 4:47 pm

      Hi Abhijit,
      As per our knowledge, there should not be any problem if your father does the payment from his account directly.
      Hope this answers your query.

  44. Toshan
    Apr 21 2015 at 9:41 pm
    Reply

    Hi Tarini,
    I hv taken a housing loan of Rs. 13.6 lakhs for 10 years from lichfl (Griha Prakash Scheme) in march end 2015. It consist of actual plot 75% value plus 4.4 lakhs against the surrender value of my lic policy. I was in big wrong assumption that I can pay significant heavy amounts right from the first month as I was expecting around 4.2 lakhs in short duration which I hv right now. My EMI is approx 18.5k but I can easily pay at least 35k per month. Kindly suggest me what to do so that I give minimum possible interest.

    Thanks & Best Regards
    Toshan

    • Priyanka
      Apr 23 2015 at 4:55 pm

      Hi Toshan,
      You can pay more as per your eligibility and end the loan earlier. You can explain the situation to the LICHFL executive and pay more and reduce the tenure of your loan. To know more call us on +91-8108899980.

  45. Ankita Jaiswal
    Apr 10 2015 at 10:22 pm
    Reply

    I have being asked to pay pre-emi by the bank on the total loan amount for a ready to move property. Can someone please suggest if this process is correct ?

    • Ashwini Menon
      Ashwini Menon
      Apr 13 2015 at 4:04 pm

      Dear Ankita,

      This doesn’t sound right. Please ask the bank why it is asking you to do so. Pre-Emi is paid when you purchase an under-construction property and not for a ready to move property. Read more about it here

  46. Varun
    Apr 10 2015 at 12:20 pm
    Reply

    And do you really think, it is possible to remove the co-applicants name from the bank (LIC) ?

    • Ashwini Menon
      Ashwini Menon
      Apr 13 2015 at 4:29 pm

      Hi Varun,

      The answer to both your questions is ‘Yes’. However, as advised earlier, request you to please speak to the banks involved and get greater clarity.

    • Varun
      Apr 16 2015 at 11:14 am

      Thank you Ashwini..

  47. Varun
    Apr 09 2015 at 2:13 pm
    Reply

    Hi Tarini,

    I am a co-applicant to my brother’s Home loan of 35 Lacks, however the whole EMI is being paid by my brother from beginning. Now I am planning to buy a flat in Bangalore. since I am a co-applicant of a existing loan will bank reduce the eligibility /reject my home loan application ?

    If Yes, is it possible to takeout my name as co-applicant ?

    Thank You!

    • Ashwini Menon
      Ashwini Menon
      Apr 09 2015 at 5:50 pm

      Hi Varun,

      To answer your first question, your bank will take into account the fact that you already are a co-applicant for a loan and calculate your eligibility accordingly. For your second question, you should approach your bank and ask for necessary documentation to remove your name as co-applicant. Since your brother has been paying the EMI anyway, it should not be a problem.

    • Varun
      Apr 10 2015 at 12:05 pm

      Thanks Ashwini, another quick question.
      If I manage to remove my name as co-applicant, it’s as good as I do not hold any home loan and of course my eligibility will be increased. Is my understanding correct ?

  48. Vikas
    Mar 26 2015 at 5:54 pm
    Reply

    Hi Tarini

    I had applied to IndiaBulls Home loan and they assessed my eligibility based on documents submitted and issued me sanction letter against the loan amount. I hadn’t given any acceptance to the sanction letter. In parallel, I got to understand that HDFC is giving me a better rate of interest at lesser processing charges. I decided to switch to HDFC being my preferred vendor and waiting for sanction from their side. I have already intimated IndiaBulls to stop processing and return my documents. The relationship manager is not available to take calls and I am not able to get hold of anyone else. Since it was early in the stage, I don’t have any account number hence call center is not able to handle it.

    Is there any risk if I don’t get my documents back? There’re no originals but some of the important proofs/confidential information documents like form 16 salary slips, ID proofs etc.. Don;t want any problem at a later stage.

    • Ashwini Menon
      Ashwini Menon
      Mar 31 2015 at 4:06 pm

      Hi Vikas,

      Since you have not signed the agreement with IndiaBulls, there is no risk involved.

  49. Santhi
    Mar 20 2015 at 3:17 pm
    Reply

    Hi, I have applied for home loan + interior loan combinable for 40 lacs for my flat. Registration completed in the last year August and 36 lacs disbursed to the land owner. The bank is not releasing pending 4 lacs even though interior work completed saying the builder not submitted the original sale deed. Its been misplaced.

    May I know whether any bank can release the complete flat cost loan amount to the seller without receiving original sale deed (2 disbursement took place as part of partial disbursement). How should I proceed further to get the original copy or a similar one?

    How can I protect my flat not being sold to other parties without my notice?

    • Tarini
      Tarini
      Mar 20 2015 at 4:52 pm

      Hi Santhi

      This is a very unusual situation as most banks disburse the loan only after getting the original sale deed and NOC from the builder. Without this, the bank has no actual collateral or right to claim the property in case the borrower is unable to the pay the loan in the future. So I believe you are being mislead. In this situation you have no option but to persuade the builder to hand over the original sale deed to your bank.
      Further, if you have been consistent with all your EMIs then you have no reason to worry about your house being sold to other parties by the bank. As far as the builder is concerned, it will be difficult for him to sell off this property as the bank is directly involved in this transaction. Since the bank has lent you money against this property, they too have equal interest in the property as you do.
      So at present, you need to focus on just getting the original sale deed from the builder.

  50. Nityanand
    Mar 18 2015 at 2:28 pm
    Reply

    I have availed home loan of 60 lakh for an under construction apartment from XYZ bank.
    Bank has disbursed 35 lakh till date depending on the demand note sent from the builder and 25 lakh is pending amount.
    Builder will send a demand note of 4 lakh on 10th of alternative month. Now if I pay next 2 installments from my pocket, will the bank object for that?
    will the bank force me to avail remaining 25 lakh, as it has sanctioned 60 lakh?

    • Tarini
      Tarini
      Mar 18 2015 at 8:05 pm

      Hey Nityanand

      Since a partial disbursement has already been made, you will not be able to change the loan amount. You will have to take the entire 60 lakhs as loan. So in this case, instead of paying the builder the sum of 8 lakhs, you can make a part prepayment to your bank, this will reduce your interest burden. I hope this helps.

    • Nityanand
      Mar 19 2015 at 1:09 pm

      Thank you Tarini.