Major Things to Know About Application for a Housing Loan

by Centre for Investment Education and Learning 

Financial institutions like as banks and Housing Finance Companies (HFCs) provide housing loans to individuals against the property that will be mortgaged to the lender.

The borrower repays in EMIs (Equated Monthly Instalments) towards interest on home loan and repayment of principal. The terms & conditions may vary with banks. Hence, potential borrowers may find it beneficial to select a loan provider with the most attractive and flexible terms at the time of availing and servicing the loan.

Eligibility..

Home Loan providers typically have eligibility criteria like nature and status of employment, age at the time of loan commencement, profession, minimum level of income, etc.

Application..

The application form must be filled in & signed by applicants by filling up their personal details, employment & income details and the details of the property for which loan is being taken.

Documents..

The lender also requires salary certificates, income tax returns, proof of identity, proof of address, last 6 months' bank statement & passport size photographs of the applicant.

Loan margin..

 The amount of loan available to the applicant will be a percentage of the value of the property. The processing fee including service tax will be charged as a percentage of the loan or as a flat charge, depending upon the loan value.

Points to note..

> The valuation and legal fee may be payable by the applicant over and above the processing fee.

> In case of salaried customers, the maximum tenure of the loan may be capped at retirement age.

> The acknowledgement receipt will be given to the applicant on submission of the application form to the bank.

Courtesy:  Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre and Arti Bhargava.

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