Our builder is suggesting that we show lesser value on documentation (of our house). Will we be able to realise 80% of the total value we are paying as promised by the banker in the beginning?
— Rajesh Normally banks grant home loan up to a maximum of 80% (90% for loan amount below ₹ 20 lakh) of the agreement value of the property as a home loan. You will have to pay for stamp duty and registration charges, as banks no longer fund these charges. The eligibility will be based on income and repayment track record. An agreement for lower amount will definitely reduce your stamp duty and registration charges. But you need to take into consideration that it may also reduce your chances of getting the desired loan amount and increase your down payment. I am 28 years old and my annual salary is about ₹ 10 lakh. I want to take a home loan of ₹ 19.6 lakh for a ready-to-move-in flat. My loan has been sanctioned at 10.10% fixed for two years (my loan tenure is 15 years). But, the interest rate after two years has not been disclosed as yet. I am told that the interest rate will be as per their BPLR (benchmark prime lending rate) of that time. I am afraid that my interest will be increased after two years. In the meantime, I have already applied for a loan with another bank where I have my salary account. This bank is offering a rate of 10.15%, but it is linked to the base rate, which I feel will come down in the near future. But, even after 1.5 months, they are quite slow. Should I wait for this bank or should I go ahead with my earlier lender?
—Vinay Shroff As per the guidelines on fair practices code for housing finance companies issued by the National Housing Bank, “The HFCs should convey in writing to the borrower by means of a sanction letter or otherwise, the amount of loan sanctioned along with all terms and conditions including annualised rate of interest, method of application, EMI structure, prepayment charges and keep the written acceptance of these terms and conditions by the borrower in its records.”
Make an official complaint either in writing at the head office of the earlier HFC you had contacted or on its website. If the query is not resolved to your satisfaction within 30 days, you can approach the National Housing Bank (which governs all housing finance companies). Their address is National Housing Bank, Department of Regulation and Supervision, (Complaint Redressal Cell), 4th Floor, Core 5-A, India Habitat Centre, Lodhi Road, New Delhi – 110003. The complaint can also be emailed at crcell@ nhb.org.in
Ideally, you should opt for a floating rate loan from your second lender as their base rate system is likely to be more transparent and you may also get the benefit of reduced rates. If you feel that you are paying a higher rate than what is being offered in the market, you can shift your floating rate loan to any other lender that offers you a lower rate of interest. You will not have to pay any penalty on these balance transfers. This will not be possible in case of a dual rate system when they are in fixed rate stage.
Harsh Roongta is CEO, Apna Paisa. He can be reached at email@example.com