How much loan am I eligible for? Before you start the home loan process, determine your total eligibility, which will mainly depend on your repaying capacity. Your repayment capacity is based on your monthly disposable/surplus income, which, in turn, is based on factors such as total monthly income/surplus less monthly expenses, and other factors like spouse’s income, assets, liabilities, the stability of income, etc.
How will the disbursement take place? The loan can be disbursed in full or in installments, which usually does not exceed three in number. In case of an under-construction property, the disbursement is in instalments based on the progress of construction, as assessed by the lender and not necessarily according to the developer’s agreement. Make sure to enter into an agreement with the developer wherein the payments are linked to the construction work and not pre-defined on a…
What are small value home loans
Banks generally classify Home loans up to the value of Rs.30-35 lakhs as ‘small value’ home loans. Small value home loans are not just for low income group. In fact, there could be three reasons you go for a small value home loan:
You are buying a small value home
You only need a small loan, since you have enough funds saved up
You want to switch your existing home loan with less than Rs.30 Lakhs outstanding
Clearly there could be many reasons for you to take a small value home loan. So let’s take a look at features of some special products banks have recently launched for this segment.
A loan against property is a boon for both business owners and salaried employees. Self-employed who are seeking funds for expansion of their business can make use of this facility. Salaried professionals facing a sudden medical crisis that may require long-term treatment, including expensive surgery, or sending children to a foreign university for higher studies can avail the facility for raising funds. A LAP not only leaves one’s savings intact, but it also comes at low-cost EMIs with repayment tenures of as long as 15 to 20 years. The low-interest rates on such loans dilute the repayment burden.
All these and other benefits help in the growth of the business or safeguard the financial future of both the loan applicant as well as his or her family. The only criterion for availing of a loan against property is that the loan should be for a legitimate purpose.
While it is relatively easy for existing customers to receive a loan against their property, new customers will have to furnish the necessary documents as well as credit history, repayment capacity and marketability of the property to be mortgaged.
An existing customer can also apply for a ‘top-up’ loan, but this would depend on factors such as repayment history of a preexisting home loan and outstanding balance on that loan, monthly income, and loan to property value ratio. However, a fresh property appraisal is not required as the property is already mortgaged with the lender.