Is there any relation between a credit card and the home loan approval process? I am planning to take a home loan after two years.
—Satya Shah Your payment track record on credit card dues will have a strong bearing on your ability to get a home loan in the future. If you have defaulted or delayed in the past on credit card payments, banks are unlikely to grant you a home loan (or any other loan for that matter) except the one which is fully backed by tangible ie easily encashable securities like a loan against gold, shares or a bank fixed deposit. It is advisable to make timely payments on your credit card dues to avoid its adverse impact on your ability to borrow in the future. However, if you are regular in making payments, it will improve your eligibility for a home loan. If there are large values payable on the credit card it could lower your home loan eligibility amount. If you are prone to impulsive purchases leading to over spending, you should shift to a debit card and keep your credit card only for emergencies.
I have a joint home loan with a housing finance company along with my father and brother (I am the primary account holder). I want to change this to a single loan holder. The bank has refused to change it as the property is mortgaged with them and the changes cannot be made unless the loan is closed.What are the options before me? Can I transfer the loan to another bank, thereby automatically removing the names of the joint holders from the loan account. My father and brother are happy to sign any legal documents.
—Subodh Sharma If your father and/or brother are also co-owners in the property then every bank will insist that they become your co-borrowers. Removing their names as co-owners will have stamp duty/registration charges implications.
However, if neither of them are co-owners and your income is sufficient to justify the loan, you can transfer the home loan from one lender to another and get the names of your father and brother removed in the process. You will need to submit a record of timely payment of your EMIs to get an offer from another lender.
I am planning to apply for a home loan to buy a residential plot in Bangalore to avail of income tax benefits. Which type of plots - BDA, corporation, gramtana, private townships - will enable me to get a home loan?
—Raghav Raman Plot loans are more restrictive and available only for nonagricultural ones bought specifically from statutory authorities such as BDA or developers approved by the specific lender. Normally, lenders will not finance more than 60% to 65% of the total cost of the plot and the remaining 35% to 40% has to come from your own sources. No tax benefits are available on a pure plot loan. You have to start the construction of the house to be able to get a loan for construction, including the cost of the plot which is called a composite loan.
Harsh Roongta is CEO, Apna Paisa. He can be reached at email@example.com