Every month the housing finance companies in India receive lakhs of applications for home loans. The majority of the people who apply for home loan do not have much knowledge about the different aspects of home loan. If you are a first time borrower, the following FAQs will greatly help you understand the intricacies of home loan.
Q. What exactly is down payment? When should I make this payment?
As a thumb rule, the housing finance institutions in India lend only about 80-85% of the property value. The remaining 15% of the money is expected to be paid by the buyer out of his/her own pocket. This amount is known as Down Payment. You need to pay this amount up front before applying for the loan.
Q. What are the different fees/chargers included in the home loan?
If you wish to avail home loan from any housing finance company, you would be obliged to pay certain fees associated with it, which are:
- Transfer charges
- Registration fees
- Processing fees
- Stamp duty cost
- Interest charges
Q. Is it possible to apply for home with a co-applicant?
Yes, you can co-apply for home loan. When you co-apply for home loan, the income of both the partners would be considered and this would make you eligible for availing higher loan amount.
Q. Can I get tax benefit on home loan?
Yes, under Section 80C and Section 24 of the Indian Income Tax Act, 1964 you can get tax rebate on your home loan. You can get tax rebate upto Rs. 1 lakh on the principal amount and Rs. 1.5 lakh on the interest amount repaid.
Q. What is the process involved in taking a home loan?
Availing Home Loan essentially involves 3 steps:
• Application – You need to submit the application form (duly filled) along with all the essential documents required by the lender.
• Sanctioning – Once you submit the application form, the lending institution processes the same and conducts a thorough investigation on the credibility of the property you wish to buy and on your personal finance credentials. Based on the assessment of the lender you get a specific amount approved for a specific duration at a specific interest rate.
• Disbursal – Once the loan is sanctioned, the lender would send you an approval letter. If you approve the offer, the lender disburses the amount.
Q. What is the process to repay the home loan?
You can repay your home loan by issuing post dated cheque leaves for the entire duration of the loan to the lender. You can also give a standing instruction to your lender for ECS so that every month the EMI amount gets automatically deducted from your bank account.
Indiabulls is rated as one of the top housing finance companies in India. If you are a first time borrower and are approaching Indiabulls for your loan, our team of highly trained professionals would guide you through every process and get your loan in a hassle free manner.
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