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Home loan is one of the most sought-after loans in India. Since not many can afford to pay the entire cost of a home at a time, home loans allow people the power of buying/building property in an easy way. However, securing a home loan involves lot many intricacies. Before applying for it, one should be well acquainted with all the nitty-gritties involved in a home loan process.
You can secure a home loan for any of the following reasons:
In India, there are more than 90 banks and institutions engaged in simplifying the home loan process for common people. You can secure upto 75% of book value for loans greater than Rs. 75 lac and 80% if the loan value is less than Rs. 75 lac. However, some banks and institutions also provide additional 40% for furniture and fixture of the book value. In any of the case, the total funded value cannot be more than 85% of the market value. At Biz2Credit, we strive hard to guide you in accordance with your income and property details shared with us. We also make sure that you secure a home loan online at an affordable interest rate with best possible ROI.
What are the different types of home loans in India?
Some home loan types available in India are:
- Land purchase loan
- Home purchase loan
- For house construction
- House extension or expansion loans
- Home conversion loans
- Loans for home renovation
- Balance Transfer home loans
- NRI home loans
- Bridged loans
- Stamp Duty loans
How does Home Loan EMI payment reduce tax obligation?
The tax benefit on home loan is classified as follows-
Tax exemption on repayment of the home loan principal: Deduction allowed under Tax Section 80C with a maximum annual tax deduction of Rs. 150,000 under the section.
Tax benefit on the interest rate for home loan: Under Section 24 of the Income Tax Act, borrowers can avail the tax benefit on the amount of interest paid on a home loan to a maximum limit of Rs. 2 lakhs for a self-occupied residential property.
Tax benefit for Joint Borrowers: In case of joint home loans, each co-borrower is eligible to receive a total of Rs. 3.5 lakhs (1.5 lakhs under section 80C and 2 lakhs under section 24) as tax exemption. Thus, if a married couple co-signs for a home loan, they can claim a total tax exemption of Rs. 7 lakhs on the joint home loan.
I haven't finalized the property yet, can I still apply for the loan?
Yes, you can. Most banks and NBFCs provide home loan pre-approval facility to interested home loan borrowers, to help with the particulars regarding their eligibility even before they have decided on a property to purchase. However, a home loan pre-approval is valid only for a maximum of months.
What is the processing time for a home loan at Biz2credit?
Your home loan will get approved as soon as all the required documents are submitted and verified successfully.
Can I apply jointly with my spouse? Will both our salaries be taken into consideration for calculating the loan amount?
Yes, you can . Both yours and your spouse's salaries will be considered for calculating the loan amount.
Can I also avail of a Home Loan for Home improvements or a Home extension?
Yes, you can apply for a personal loan and use it for home improvements or home extension.
What documents do I need to submit along with my application for a Home Loan?
The documents that need to be submitted may vary from one lender to another. Some of the important documents to be submitted include:
- Completed loan application form
- Identity proof – PAN card/ Voters ID/ Passport/ DL
- Passport size photographs
- Past 6 months Bank statement and salary certificates/ Latest ITR acknowledgement
- Proof of Residence- telephone or electricity bill/ passport/ voter ID/ property tax receipt
- Copy of plan approved for the proposed construction/ extension
Cost estimation/ valuation report from Bank's (or finance company) authorised surveyor/evaluator.
- Allotment letter of housing board/ NOC of the society/ Builder etc. as well as any other land use certificate
How and when does the floating rate of interest change?
As per latest RBI rules, banks use the MCLR (Marginal cost of lending rate) method to determine the interest rate on home loans. In case of a floating rate home loan, the banks are now expected to change the interest rate either annually or every six months.
Do I need to pay a fee to apply for Home Loan at Biz2credit?
Biz2Credit does not charge any fee to the home loan applicants. However, the respective lenders or banks do charge the same. The processing fee varies from one bank to another, and is usually between 0.25% to 0.50% of the loan amount.