Buying a house is an exciting event. It will probably be the biggest purchase you will ever make in your life. Understanding the steps involved in securing a housing loan will help you save time and avoid uncertainty and anxiety.
At Opulence Builders, we advise you how to make your money work over time for you. By helping you in getting the best home loan deal we help you in converting your dream of owning a house to reality. With interest rates already at an all-time low, tax benefits lowers the effective interest rate even further. Housing Finance Institutes (HFIs) offer flexibility in repayment and are constantly innovating the home loan schemes.
This information will give you an insight into the various issues on financing a house and outlines the major steps in the overall process of financing a house.
DOCUMENTS REQUIRED
For NRI Customers:-
- Application form
- Passport and visa copy
- Photograph
- Salary certificate / Slip
- Work Permit / Job Contract
- 6 months bank statement with salary credit
- Processing fee cheque from NRE/NRO account.
- Power of Attorney (if customer is not here you can execute power of attorney in bank's format).
- If the customer is from UK or US need credit report.
For NRI Customers (Business Class):-
- Application form
- Passport and visa copy
- Photograph
- MOU (Memorandum of Understanding)
- Audit Report (attested by CA)
- Current Account Statement for last 6 months
- Company Profile
- Personal Bank Statement for last 6 months (Overseas & NRE/NRO) processing fee cheque form NRE/NRO account.
- Power of Attorney (if customer is not here you can execute power of attorney in bank's format)
- If the customer is from UK or US need credit report.
For Indian Customers:-
- Application form
- PAN card copy or address proof
- Photograph
- Salary certificate / Slip
- 6 months bank statement with salary credit
- One cheque leaf for processing fee.
For Indian Customers (Business Class):-
- Application form
- PAN card copy or address proof
- Photograph
- MOU (Memorandum of Understanding)
- Audit Report (attested by CA)
- Current Account Statement for last 6 months
- Company Profile
- Salary certificate / Slip
- 6 months bank statement with salary credit
- One cheque leaf for processing fee.
Eligibility conditions for a home loan: While determining the loan eligibility of a customer, lending institutions primarily focus on the repayment capacity. The repayment capacity is determined by taking into consideration factors such as income, age, qualifications, number of dependants, spouse's income, assets, liabilities, stability and continuity of occupation and savings history
Maximum loan amount: Housing finance institutions generally finance upto 75%-85% of the asset value. Depending on the institution, the maximum loan amount may vary from Rs.1 lakh to Rs.1 crore.
Repayment period options: Repayment period options generally range from 5 to 15 years. A few Financial institutions offer a 20-year repayment period for NRIs.
Payable fees and charges: Home loans are usually accompanied by the following additional costs:
a) Processing fee: It's a fee payable to the lender on applying for a loan. It is either a fixed amount not linked to the loan or may also be a percentage of the loan amount.
b) Prepayment Penalties: When a loan is paid back before the end of the agreed duration a penalty is charged by some banks/companies, which is usually between 1% and 2% of the amount being pre paid
Security for the loan: In most cases, the property to be purchased itself becomes the security and is mortgaged to the lending institution till the entire loan is repaid.
Time required for loan disbursement: The average time required for loan disbursement is 3-15 days subject to satisfactory and complete documentation and completion of all relevant procedures.
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