HT Estates - - HTESTATES - Harsh Roongta

My CI­BIL score is 764 and my an­nual in­come is ` 8 lakh. Will I be el­i­gi­ble for a home loan of ` 20 lakh?

— Suresh Gen­er­ally, a CI­BIL score of over 750 is con­sid­ered to be good enough to be el­i­gi­ble for any loan. Apart from CI­BIL score, the lender will de­ter­mine your loan el­i­gi­bil­ity based on your age, your in­come, your reg­u­lar house­hold ex­penses and your ex­ist­ing loans, if any. Nor­mally, lenders grant home loans of up to a max­i­mum of 90% of the agree­ment value of the proper- ty. This means that your down pay­ment will have to be at least 10% of the agree­ment value. More­over, as per the guide­lines of RBI, the bank will not take into ac­count stamp duty and reg­is­tra­tion cost, while cal­cu­lat­ing the cost of the prop­erty. There­fore, in ad­di­tion to 10%, you will have to fully fund the cost of stamp duty and reg­is­tra­tion charges.

Based on your i ncome, you should be able to get the re­quired loan of ` 20 lakh eas­ily if you have no other loan to ser­vice and as­sum­ing you

are not more than 40 years old. I want to take a loan of ` 20 lakh to re­con­struct our old house. The house is in my fa­ther’s name. What should I do in this case and which bank will be best to go for it?

— Sub­hash If your fa­ther owns the house, you will be able to get a loan only if your fa­ther joins you as joint bor­rower. The lenders will treat this as a self-con­struc­tion loan. You will need to sub­mit the ap­proved plans and de­tailed cost es­ti­mates from an ar­chi­tect or a civil engi­neer and the loan will be pro­vided on that ba­sis.

Please note that as you are not an owner or co-owner in the prop­erty you will not be el­i­gi­ble for any tax ben­e­fits on the loan re­pay­ments even if the loan is sanc­tioned based on your in­come and you ac­tu­ally ser­vice this loan. The lender will also need to be re­as­sured about the fact that the ti­tle will pass on to you af­ter your fa­ther so that they are re­as­sured that you will con­tinue mak­ing the pay­ment to them in the event of his demise.

Al­ter­na­tively, you can pur­chase a part of the land on which the prop­erty is to be con­structed from your fa­ther to be­come a joint owner of the prop­erty. This will also help you in avail­ing the tax ben­e­fits also. Since not all lenders are com­fort­able in pro­vid­ing self­con­struc­tion loans you choices will be lim­ited.

You will need to se­lect a lender like HDFC or ICICI or any other lender that is com­fort­able pro­vid­ing loans for self con­structed prop­er­ties.

You will need doc­u­men­tary proof of your in­come. In case of salar­ied per­son, apart from the ITR and Form 16, it can be in the form of salary cer­tifi­cate backed by monthly credit en­try in a bank ac­count, PF de­duc­tion proof, etc. I want to pur­chase flat worth ` 50 lakh. My monthly in­come is ` 40k. How much loan can I get from bank? The down pay­ment for the flat is ` 10 lakh.

— Rahul For a flat cost­ing ` 50 lakh, you will need a down pay­ment of atleast ` 13 lakh to ` 14 lakh, as the bank will fi­nance only up to 80% of the agree­ment value. You will have to pay the stamp duty and reg­is­tra­tion charges your­self, as the banks no longer fund th­ese charges.

Based on your in­come of ` 40,000 per month, you will be el­i­gi­ble for a home loan of ap­prox­i­mately ` 18 lakh at 10.25% per an­num for a ten­ure of 20 years, pro­vided you have no other loans to ser­vice.

This means that your down pay­ment will go up con­sid­er­ably and you will have to make good that short­fall through your own sources. You can also in­crease your el­i­gi­bil­ity for home loans by adding your earn­ing spouse /par­ents as co-bor­row­ers or at­tempt to in­crease the ten­ure of loan, if you are young enough. Harsh Roongta is CEO, Apna Paisa. He can be reached at ceo@ap­na­

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