HT Estates - - HTESTATES - Harsh Roongta

For down pay­ment, how much should one keep aside ide­ally? How do you ar­rive at this per­cent­age?

— San­tosh Verma Nor­mally len­ders grant home loan of up to a max­i­mum of 80% (90% for loan amount below ₹ 20 lakh) of the agree­ment value of the prop­erty as home loan. The over­all el­i­gi­bil­ity will be based on your in­come, your reg­u­lar out­go­ings and re­pay­ment track record and any ex­ist­ing loan, which you are presently ser­vic­ing.

This means that your down pay­ment will have to be at least be­tween 10% and 20% of the cost of the prop­erty. More­over, as per Re­serve Bank of In­dia guide­lines, the bank will not take into ac­count stamp duty and reg­is­tra­tion cost, while cal­cu­lat­ing the cost of the prop­erty. There­fore, in ad­di­tion to 10% or 20%, you will have to fully fund the cost of stamp duty and reg­is­tra­tion charges.

The prop­erty is val­ued by the val­uer ap­pointed by the bank. Based on that, the amount to be fi­nanced for the prop­erty is de­cided by the bank. In case the val­u­a­tion done by the val­uer is lower than the agree­ment value, your el­i­gi­bil­ity in per­cent­age terms shall be de­cided on the ba­sis of the value as ar­rived at by the bank’s val­uer and you will have to pay the re­main­ing amount. More­over, there are some com­po­nents of the cost of the flat, which may or may not be fi­nanced by the banks and con­se­quently your down pay­ment re­quire­ment for the prop­erty will go up.

I am go­ing to buy a flat in Thane, Ma­ha­rash­tra. I’m work­ing but my wife is not. Can she be my coap­pli­cant for a home loan?

—Shankar Ra­man It is de­sir­able to in­clude the name of the spouse as a joint owner for the pur­pose of suc­ces­sion. If your spouse is a co-owner, then she will nec­es­sar­ily have to be­come a co-bor­rower. If you de­cide against mak­ing her a co-owner, then there is no ad­van­tage in mak­ing her a co-bor­rower. How­ever, a lot of len­ders in­sist on the spouse be­com­ing a co-bor­rower even if she is not a co-owner. My par­ents own a piece of land on which we wish to con­struct a house. If I take a home loan in my name as a co-ap­pli­cant, will I get tax ben­e­fits even if the land is not in my name. If my par­ents give me the land as a gift, and if I ap­ply for a home loan, will I be el­i­gi­ble for tax ben­e­fits?

— Sa­gar Sharma To get a loan, your par­ents will have to be co-bor­row­ers with you as they are the own­ers of the prop­erty. You can­not claim any tax de­duc­tion ben­e­fits on the loan if you are not a co-owner of the prop­erty. Be­com­ing a co-owner through a gift deed or sale deed will help you get tax de­duc­tion but both op­tions will entail pay­ment of stamp duty. I want to buy a flat in Delhi and the seller has in­formed me that the flat was al­lot­ted to him by DDA on lease­hold ba­sis. Later, he got the flat con­verted to free­hold. What doc­u­ments do I need to check?

Sangeeta Sharma Check the copy of con­veyance deed and find out if the prope rty tax and other util­ity bills have been paid up to the date of pur­chase. Ver­i­fi­ca­tion can also be done at the sub-reg­is­trar’s of­fice to find out if trans­fers in re­spect of the flat are reg­is­tered with him. Get a lawyer for due-dili­gence.

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

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