virashavirashavirasha

Home Loans FAQs

1. Our home loans are supported by

SBI Bank, HDFC Bank, Canara Bank, IDBI Bank, ICICI Bank, and all other leading financial institutions.

2. How is my home loan eligibility determined?

Your Home Loan eligibility is determined by your repayment capacity, taking into consideration, factors such as Your:

Income  Qualifications  Age  Spouse's income  No. of dependants  Stability and continuity of occupation  Assets/Liabilities  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.

3. What are the types of home loans available?

These are a range of Home Loans available:

  • Home Purchase Loans: for the purchase of a new home.
  • Home Improvement Loans: for implementing repair works/renovations in a home that you have already purchased.
  • Home Construction Loans : for the construction of a new home.
  • Home Extension Loans: for expanding/extending an existing home.
  • Land Purchase Loans: for purchase of land for home construction/investment purposes.
  • Home Conversion Loans: for those who have financed the present home with a home loan and wishes to purchase/move to another home for which some extra finances are required. In Home Conversion Loan, the existing loan is transferred to the new home including the extra amount required, eliminating the need for pre-payment of the previous loan.
  • Balance Transfer Loans: helps you to pay-off an existing home loan and avail the option of a loan with a lower rate of interest.
  • Bridge Loans: for people who wish to sell the existing home and purchase another. This loan helps you finance the new home, until you find a buyer for your old home.
  • Refinance Loans: helps you pay off the debt you have incurred from private sources like relatives/friends, for the purchase of your present home.
  • Stamp Duty Loans: is sanctioned to pay the stamp duty amount that needs to be paid on the purchase of property.
  • Loans to NRIs: to build/buy a home in India. EMI is payable till the loan is paid back in full. It consists of a portion of the interest as well as the principal.

Some of the incentives offered by banks are :

  • Loan sanction without requiring you to identify property as a pre-requisite for eligibility.
  • Free accident/property insurance.
  • Waiving of pre-payment penalty/processing fee.
4. How long does it take to get my application processed and the loan sanctioned?

It takes around two weeks for processing of one's application if all the necessary documents are in order and takes another week for the bank to inspect the property papers and make the disbursement.

5. What is the maximum amount I can borrow?

The maximum amount that you can borrow depends on factors such as:

  • The purpose of the loan.
  • Whether it is for purchase of property or improvement or renovation.
  • Or purchase of land for development etc.

Besides, your residential status (whether resident Indian or Non-Resident Indian) will also be significant on the maximum quantum of loan that you can borrow. Typically Home Loans are provided for in the range of 75%-85% of the cost of the property, including cost of land.

6. What security/collateral do I have to provide?

Banks usually take some additional securities which are called collateral securities. Collateral could be in the form of guarantee from one or two persons, assignment of life insurance policies, the surrender value of which should be equal to the loan amount, deposit of shares, and units or other securities. These additional securities are taken just incase a loan is not paid back; recourse may be taken to such securities instead of depending upon the mortgage of the property which is the last resort.

7. Can I take a Home Loan for construction in one city while working in another city?

Yes, you can take loan for construction in one city while working in another. The banks usually service this loan after getting details of the plot legally verified.

8. What is the range of interest rates offered?

The rate of interest on housing loan taken from any Bank or Non Banking Financial Companies (NBFC’s) keeps changing, with respect to the RBI’s policy after keeping fix margin by bank above Benchmark Rate and It also depends on the tenure of the loan, fixed/floating rate, credit profile of the borrower etc.

9. How is the interest rates calculated on my loan?

Most banks follow the yearly reducing-balance method, some banks may also follow the daily or monthly reducing-balance method, which results in a lower interest burden.

10. What is the Fixed Rate of Interest?

Fixed Rate of Interest means that the interest rates remain FIXED for the entire duration the loan. This basically means that you do not benefit, even if the rates of interest drop in the market.

11. What are the repayment period options?

The maximum period over which one can pay the loan varies for every bank, and is also different for every scheme. Also your residential status makes a difference. If you are a resident Indian, you could avail of a loan for duration of 5-20 years. Few banks offer a 20-year repayment period, generally at a higher interest rate. As a Non-Resident Indian, you can only avail of a loan for a maximum period of 7 years.

12. Can I repay my loan ahead of schedule?

Yes, you can pay your loan ahead of schedule, without any pre closure charges.

13. What are the fees and charges payable and when are they payable?

Banks charge fees at the time of application (processing fee) and at the time of loan sanction, all the charges are as per Bank norms. The processing fee is either a fixed amount not linked to the loan or it may be a percentage of the loan amount.

14. What is the EMI?

EMI or Equated Monthly Installments refers to the fixed sum of money that you will be paying to the bank every month. The EMI comprise of both interest and principal repayment. The amount of the EMI depends on the quantum of loan, interest rate applicable and the term of the loan.

15. In how many installments can the loan be disbursed?

The loan can be disbursed in full or in suitable installments (normally not exceeding 3 months) taking into account the requirement of funds and progress of construction, as assessed by the bank.

16. Do I get a tax benefit on Home Loan?

Yes, you are eligible for tax benefits on the principal and interest components of the loan under the Income Tax Act, 1961. However as the benefits could vary each year, do check out the current benefits available.

17. What are the documents required at the time of application?

Each bank has its own list of documents that one must submit at the time of application. The common documents that the banks require at the pre-approval stage are:

  • Passport size photograph.
  • Proof of Age.
  • Address Proof.
  • Pan Card.
  • Copy of Bank A/C statements for the last 6 months.
  • Copy of latest credit card statement.
  • Signature verification from your banker.

If you are self-employed you require :

  • Your business track record . Copy of audited financial statements for the last 2 years.

If you are salaried, you need :

  • Salary and TDS certificate Latest pay slip. Letter from employer.

If you are NRI, you require :

  • 1 passport size latest photograph of each applicant (applicant & co-applicant) with signature across
  • Valid passport copies for all the applicants Valid visa copies for all the applicants
  • Cheque / Draft in INR for fees (as per applicable rate) and the date must be in dd/mm/yyyy format*
  • Power of Attorney document as per format duly signed by all the applicants
  • Authority letter duly signed by all the applicants as per specified format
  • Company details as per format
  • Copy of current overseas residential verification proof of all the applicants to the loan. (Driving license or bank statement showing overseas address or latest insurance premium receipt or utility bill)
  • Copy of PAN Card for the Ist applicant OR Form 60 as per format attached here with self attested address proof of all applicants

And at the disbursal stage (for property already located), you need to submit the following :

  • Allotment letters.
  • Photocopies of title deeds.
  • Encumbrance certificate.
  • Agreement to sell.

For self-construction:

  • Approved plans and clearance certificates along with estimates.
18. Others

For the Bank Home Loans, all the formalities, payments etc will be taken care according to the understanding between the Bank and individual home owners. No fees or charges will be paid by M/s Virasha Infrastructure.

The above information is indicative and may change as per Bank norms. This is for information purposes only.