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 email@example.com