HT Estates - - HTESTATES - Harsh Roongta

I have availed a hous­ing loan (dual rate with a monthly rest) for ` 45 lakh for a pe­riod of 15 years. The in­ter­est rate his­tory so far has been as fol­lows:

April 2010 – March 2012 – 8.75% On ex­piry of two years, (teaser loan) the in­ter­est rate was hiked to float­ing rates as fol­lows:

April 2012 – Sep 2013 – 11.65% Oct 2013 – Dec 2013 – 11.90 Jan 2014 – Present – 12% In Jan­uary 2013, I had an op­tion to switch over from a re­tail prime lend­ing rate (RPLR) of 4.75% to 6% on pay­ment of ` 11,553. But I did not ex­er­cise it. Now the term for the loan, which was ini­tially 180 in­stall­ments, has in­creased to 226 in­stall­ments (bal­ance term). On pay­ment of the one-time fee of

` 11,397, the bal­ance term will be re­duced to 170 in­stall­ments. How do I rec­tify the sit­u­a­tion and pre­vent such heavy losses?

- Anand Mal­ho­tra If your loan is availed from the bank, you should ask your bank to get your loan mi­grated from the PLR sys­tem to the base rate sys­tem, at no ad­di­tional cost. Once that is done, you will be au­to­mat­i­cally shifted to the base rate regime, where the rate

of in­ter­est will be bet­ter linked with the cur­rent in­ter­est rates.

Yes, you have been pay­ing an ex­or­bi­tantly higher rate of in­ter­est (when the av­er­age rate of in­ter­est was around 10.50%– 10.75%) for the last cou­ple of years af­ter the end of your teaser rate pe­riod. The cur­rent ( Jan­uary 2014) com­pet­i­tive rate in the mar­ket for a loan amount of ` 40 lakh to ` 45 lakh is around 10.25%. So, you should im­me­di­ately ex­er­cise the op­tion of switch­ing your loan to a lower rate of in­ter­est, ie, 10.25% if your cur­rent lender is of­fer­ing you to do the same at a small fee of ` 11,397.

You will quickly gain back this amount in a few months and then en­joy the ben­e­fit of lower rates for the bal­ance ten-

ure of the loan.

If your cur­rent lender is not will­ing to re­duce the rate of in­ter­est to 10.25% pa, you can eval­u­ate the op­tion of switch­ing your loan to an­other lender.

Since t he RBI and NHB h ave a l r e a dy i n s t r u c t e d banks and hous­ing fi­nance com­pa­nies not to charge the fore­clo­sure fee in re­spect of float­ing loans, you will not have to pay any penalty for shift­ing such loans. In fact, most lenders will agree to take over your loan with­out any sig­nif­i­cant pro­cess­ing fees.

You will need a good track record of pay­ment of EMIs to be able to get an of­fer from an­other lender to take over your ex­ist­ing loan.

My wife and I are salaried em­ploy-

ees. We re­cently pur­chased a house in Mum­bai. My wife is the main ap­pli­cant and I am a co-ap­pli­cant. The EMI is paid from my wife’s ac­count (sin­gle hold­ing ac­count), and she will be claim­ing in­come tax de­duc­tion on ac­count of in­ter­est and prin­ci­pal. Can I also claim de­duc­tion on ac­count of in­ter­est and prin­ci­pal (ra­tio 50:50)? I al­ready own a flat in my name and I am claim­ing de­duc­tion on in­ter­est and prin­ci­pal pay­ment. If I rent out this flat, can I show the rental in­come as my in­come from hous­ing?

- Sud­hir Misra In or­der to claim tax ben­e­fits on home loans, you should ei­ther be an owner or a joint owner of the prop­erty. While own­ing the prop­erty, you should also be ser­vic­ing the loan so as to en­ti­tle you to the

tax ben­e­fits. Since your wife is ser­vic­ing the loan, you can­not claim the tax ben­e­fits in re­spect of this home loan. The tax ben­e­fits on home loan can be claimed only in your share of the home loan and not in the ra­tio of your own­er­ship of the home.

In case you want to claim the tax ben­e­fits in the ra­tio of 50%, you can pay 50% of the EMI to your wife and also ex­e­cute a MoU men­tion­ing all the facts about the prop­erty own­er­ship and ser­vic­ing of the loan. In case you de­cide to let out the prop­erty, you will be able to claim full in­ter­est against your rental in­come.

Harsh Roongta is CEO, Apna Paisa. He can be reached at ceo@ap­na­

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