[Tmdl.edu.vn] Check out the details of home loan offers by top banks and HFCs.
Buying a home outright is like achieving a lifelong goal. It is not necessary for you to have the whole amount required for this important acquisition at your disposal. Home loans are easily accessible. To make this significant purchase without difficulty, you may choose any of the most popular types of house loan options.
In this article, we will talk about the many aspects of home loans, and the various home loan offers that are made accessible to customers.
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What are the main features and advantages of home loans?
The following is a list of some essential aspects and advantages of a home loan:
Option to pick a tenure
You will find that the majority of financial institutions provide you with the freedom to choose the duration of your home loan, which often falls somewhere between 15 and 30 years. Your monthly EMI will be directly impacted by the length of the loan that you choose.
Comparatively more affordable than personal loans
Home loans often have a lower interest rate than personal loans. This is due to the fact that home loans are secured loans, but personal loans are not.
Tax advantages
Both interest and principal payments qualify for tax incentives. An annual deduction of up to Rs 2 lakhs is available for interest payments, while an annual deduction of up to Rs 1.5 lakhs is available for principal payments.
Balance transfer for a home loan
With this service, you may switch to a new lender that offers a reduced interest rate on your existing loan balance.
What are the various options for home loans?
Take a look at some of the following examples of the most frequent types of home loans offered by banks and other financial institutions:
Home loan for a purchase
This kind of loan is for acquiring a residential property, and it may be used for buying resale homes, homes that are already finished and ready to move into, or homes that are still in the process of being built.
Home loan for a new construction
The borrower must already own a plot of land in order to qualify for this loan, which may only be used for the building of a home.
Home loan for the renovation
One may use this in order to make alterations or enhancements to an already existing residence.
Bridge home loan
Those who are interested in expanding the size of their current residences or improving their quality may apply for this loan. This kind of loan helps make up for the shortfall in the money that might occur when there is a gap in time between the sale of a current house and the purchase of a new one.
Step up home loan
This kind of house loan, which is targeted mostly at young paid professionals, enables you to qualify for a larger sum than what you would be able to get via standard home loans. In addition, the interest payments on these loans are maintained at a more manageable level throughout the first few years of the loan.
Balance transfer home loan
You will be able to take advantage of lower interest rates by using this feature, which enables you to switch the lender that is handling your current home loan to a different one.
Considerations prior to submitting a home loan application
Before submitting an application, there are a few important things you need to think about, including the following:
- Check to see whether the amount of your present salary would allow you to make the monthly EMI payments.
- Do your homework on the many kinds of loans that are offered before making a decision.
- Pick a payback term that works best for your lifestyle and budget. When the tenure is shorter, the EMI will be greater, and vice versa.
- Be familiar with the prepayment conditions of the loan as well as any relevant costs.
- Inquire about any extra fees that may be associated with the loan from the lending institution.
- Finally, before signing any of the paperwork, make sure you’ve thoroughly looked through them all.
Best home loan offers in 2022
Home loans are made available by a number of different financial organisations in India. These lenders also make available to borrowers a variety of different home loan offers, which are intended to make the home-buying process easier for consumers. A few of the home loan offers provided by different banks are as follows:
Kotak Mahindra Bank Home Loan
The Kotak Mahindra Bank Housing Loan has the lowest possible interest rate, and the following offers are also accessible to you:
- Reduced rates of interest beginning at just 7.50 per cent per year.
- In certain cases, a processing charge of approximately 0.50% of the amount borrowed may be required.
- Up to a 20-year loan term
- No fees for prepayment
- Balance transfer with an available top-up loan
Axis Bank Home Loan
The following are some of the offers that are available to salaried workers under the Axis Bank Home Loan programme:
- Low borrowing rates begin at 7.60% per year.
- Maximum loan amount of Rs.5 crore
- Maximum loan duration of 30 years
- A processing charge of 1 percent of the amount borrowed
- No prepayment or foreclosure fee
HDFC Reach Home Loans
The following is a list of the offers that come with HDFC Reach Home Loans for professionals who are self-employed:
- Attractive interest rates begin at 8.10% per annum.
- Versatile payback terms of as long as 30 years
- A processing fee equal to 2% of the amount borrowed is charged.
- Minimum documents and an annual income of Rs. 2 lakh are required.
- Include a female co-owner to reduce interest rates.
LIC HFL Home Loan
The following offers are available via the LIC HFL Home Loan for Senior Citizens and Pensioners:
- Competitive interest rates begin at 6.90% per year.
- Repayment terms of as long as fifteen years or until the age of 70
- A processing charge of between Rs. 10,000 and Rs. 15,000 is required.
- A loan that must be repaid before becoming 70 years old
- Individuals who are over 50 and are currently working and participating in a pension plan are also eligible to apply.
SBI Privilege Home Loan
The following home loan offers are included with the SBI Privilege Home Loan for the employees affiliated with the government:
- Low borrowing rates begin at 8.05% per year.
- Zero transaction fee
- Maximum loan term of 30 years
- Reduced rates of interest for female borrowers
- Interest reduction when a checkoff is made
Axis Bank NRI Home Loan
The following are the offers that come with the Axis Bank NRI Home Loan, which is the offering that is most suited for NRIs.
- Competitive annual interest rates beginning at 10%
- 25 years of the loan flexibility
- Minimal paperwork and rapid disbursal
- Minimal service charge
- There are no foreclosure fees
HDFC Home Loans
The HDFC Home Loans for purchasing comprise a number of different offers, which are as follows:
- Low borrowing rates begin at 8.10% per year.
- Loan tenure flexibility of as much as 30 years
- 0.50% of the amount borrowed may be assessed as a processing charge.
- Special provision for Indian army personnel under the AGIF collaboration
- Expert legal and technical guidance
Indiabulls Housing Finance Loan
The Indiabulls Housing Finance Loan may be used for construction, and the following offers are included with it:
- Attractive loan rates begin at 7.60% per annum.
- Flexible repayment possibilities
- Processing fees begin at 0.50% and increase.
- No advance payment fees
- Complete loan processing using the mobile app or the website.
DHFL Home Loan
The DHFL Home Loan is intended for renovation, and some of the featured offers are as follows:
- Annual interest rates beginning at 6.90%
- Maximum loan duration of ten years
- Rs.2,500 processing cost
- Maximum loan amount of 90% of the property’s valuation or 100% of the projected cost of improvements.
- Available to both employees and independent contractors.
Charges and fees for a home loan
The following fees may be assessed to your account when you take out a loan, however, it all depends on the kind of loan you want to get:
Processing fees
After the application for the home loan has been processed and authorised, the home loan issuer will need payment of this one-time, non-refundable charge. The processing fee might differ from bank to bank and from loan programme to loan programme, depending on both factors.
Prepayment charges
If you want to pay off your house loan prior to the end of the loan’s term, the lender may charge you an early repayment penalty in the form of an additional cost.
Home Insurance
In order to guarantee that the insurance plan is maintained throughout the tenure of the home loan, the payment must be directly paid to the relevant firm at all times throughout the term.
Default charges
If you are late with the Equated Monthly Instalments or Pre-EMIs, your loan company may impose additional fees. All banks have different fees associated with default.
Conversion fees
When you make the decision to convert to a special loan programme in order to decrease the interest rate that is involved with your existing loan programme, some banks may also charge you a conversion fee.
Cheque dishonour charges
If the loan supplier discovers that a check the borrower has written has been returned unpaid because of inadequate funds, the borrower will be charged a fee.
Expenses due to external opinion
In certain scenarios, you may wish to seek the advice of an independent professional, such as an appraiser or an attorney, about the loan and the terms associated with it. This charge must be paid to the individual who is responsible, not to the financial institution that is making the loan.
Incidental charges
This charge is intended to compensate the bank for the costs it incurred in attempting to collect past-due payments from a customer who was late with at least one of his monthly payments.
Statutory and regulatory fees
All costs involved with filing documents at India’s Central Registry of Securitisation Asset Reconstruction and Security Interest (CERSAI), filing a Memorandum of Entry and Deposit, and paying stamp duty are included in the quoted price.
Alteration of the loan term
If you want to modify the repayment period that is linked with your loan, some banks may additionally charge you a small fee.
Home loan eligibility
Age
The age requirement starts at 18 years old and goes up to 70 years old.
Resident Type
The candidate must be (any):
- Permanent Indian resident
- India with Non-Resident Status (NRI)
- Individual of Indian Descent (PIO)
Employment
The candidate may be (anyone):
- Salaried
- Self-employed
Net Annual Income
At least 500,000 to 600,000 rupees, with the exact amount depending on the nature of the job.
Credit score
A satisfactory credit rating of 750 or above, acquired from a reputable credit agency, is required.
Documents required for a home loan
Identity proof (anyone)
- Voter ID
- Valid Passport
- Driving Licence
- PAN
Residence proof (anyone)
- A copy of the most recent phone bill, water bill, and electric bill
- A copy of a current and valid passport, Aadhaar card, or driver’s licence is required.
Other documents
- Card of Identification of Employer
- Form for applying for a loan that has been completely filled out and has three images that are passport size attached to it
- In the event that the candidate has any other active loans with other banks or financial organisations, a loan account summary covering the preceding year must be provided.
- Statements of all of the applicant’s bank accounts for the most recent six months, regardless of which accounts they hold.
Income proof documents for a home loan
For self-employed applicants and co-applicants
- Returns for the preceding three years
- Credential of Competence (for physicians, attorneys, and other professions).
- The balance Sheet reviewed by a CPA and the Profit and Loss Statements for the last three years
- Business Licence Specifics
- Address validation
- TDS Credential
For salary applicant and co-applicant
- Statements of salary for the most recent three months
- A copy of either your Form 16 or your tax filings for the previous two years.
Property papers for a home loan
- Memorandum of Purchase (anyone)
- Registered Sales Contract
- Stamped Sale Agreement
- Allotment Letter
- Occupancy Certificate in the event that the home is already occupied and available for new tenants.
- A copy of the builder’s authorised development agreement, as well as the Approved Plan, is required.
- In the event of a newly purchased property, a conveyance deed is required.
- statements from your bank account that detail all of the payments you’ve made to the vendor or builder
What should you do if the home loan application is denied?
Even if a bank turns down your preliminary home loan application, you may try again at a later date. There are, however, certain things you need to think about first.
Credit score
Before deciding whether or not to accept a loan application, lenders investigate the applicant’s potential to repay the loan. This is necessary since home loans are often long-term consumer loans. When it comes to determining whether or not you are able to repay a loan, your credit score is a significant factor.
Bad credit increases the likelihood that a loan application will be denied. Financial companies and banks use credit scores as a measurement of your trustworthiness before approving a loan. Consequently, before making a loan application, you should check the credit score.
Loan Amount
Due to the permanence of the expense of buying or building a house, we frequently fail to account for the full extent of our financial commitment. Lenders figure out the maximum number you may borrow based on your current salary or income. The size of the loan you requested likely had a role in the decision to deny your application.
Your loan application can be denied if the amount requested for a loan is more than the maximum amount for which you are qualified to get a loan. In circumstances like these, you may want to think about raising the amount of the down payment you have on your house loan in order to bring the total cost of the loan down.
Other ongoing loans
A high number of other debt obligations may also cause a bank to reject your request for a home loan. Since financial institutions want to make sure you won’t be spending more than half of your paycheck on debt, having any other long-term debts outstanding might cause your application to be denied.
A person’s ability to repay debt is negatively affected when they take on too many revolving loans. Therefore, you should pay off any other debts you have before applying for a home loan.
Co-applicant
There are situations when applications are denied because the applicant has a low income. Having a co-applicant, such as a close relative, is an option in such a scenario. Because the co-income applicant’s reputation will also be considered in determining your eligibility, this will augment the full value to which you will be entitled.
Employment
The applicant’s current job status might be a determining factor in whether or not a loan is granted. If the lending institution discovers that you regularly change employment, they may reject your application. However, if you have a steady job with a reputable organisation, it might seem good on your application. If your application for a home loan was turned down, and you’ve only been with your present company for a short while, here’s what to do. You may want to wait a little longer before applying again.
Documentation
There is a great deal of paperwork involved with home loans, including evidence of identification and residence, financial records, tax records, payslips, property documents, paperwork authorised by relevant agencies, etc. A loan application may be denied even if all paperwork is in order. If you need assistance putting together the right paperwork for a loan, you can always ask the customer relationship executives at the financial institution for their assistance.
FAQs
What is the highest amount of home loan I can obtain?
Are there tax advantages for the home loan?
Yes. In accordance with sections 80C, 24(b), and 80EEA, you may be able to deduct a portion of the money you pay toward your home loan’s principal and interest payments. Please check with your chartered accountant or tax expert for the most up-to-date information on the advantages, since they may change from year to year.
Is home loan insurance considered necessary?
Insurance for your home loan is not required by law in any state. To protect yourself against the possibility of unanticipated events, however, it is strongly recommended that you get insurance.
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