CHEQUE BOOK

HT Estates - - HTESTATES - Harsh Roongta

My first house is regis­tered in my wife’s name. We ap­plied for a home loan of ₹ 40 lakh and I am a coap­pli­cant. Will the tax re­bate be ap­pli­ca­ble to both of us?

—Sangeet Shah If you are not the co-owner to the said prop­erty, you will not be able to claim any tax ben­e­fits on the loan taken for this pur­pose. Just be­ing a coap­pli­cant in the home loan is not enough, you need to be a co-owner.

How­ever, your spouse can claim tax ben­e­fits on the home loan un­der Sec­tion 80 C for the prin­ci­ple re­pay­ment and for the in­ter­est on home loan paid un­der Sec­tion 24. I have a prop­erty worth ₹ 2 crore and want to take a loan against it. I am a re­tired per­son but work­ing on a con­tract ba­sis. My pen­sion is ₹ 20,000 and monthly in­cen­tives through the con­tract are around ₹ 60,000. What is the max­i­mum loan amount that I can avail?

—Shekhar Gupta Nor­mally, the max­i­mum age for any loan is re­stricted to 60 years for a salaried per­son and 65 for a self-em­ployed pro­fes­sional so as to en­sure that the loan is fully paid on or be­fore the re­tire­ment age. How­ever, even if you are a re­tired per­son, you can get a loan only if you can prove the past and fu­ture con­sis­tency of your con­trac­tual in­come for at least the ten­ure of the loan. In case you are not able to es­tab­lish con­sis­tency of your con­trac­tual in­come, you can add the name of your earn­ing fam­ily mem­ber as co-bor­rower to ac­cess the loan eas­ily.

Typ­i­cally, you can get up to 50% to 60% of the value of the prop­erty or twice your an­nual in­come (which­ever is lower) as a loan against prop­erty. It is avail­able gen­er­ally for a pe­riod rang­ing be­tween five and 15 years. The rate of in­ter­est on loan against prop­erty is higher than a reg­u­lar home loan and is in the range of 11.75% to 14% per an­num.

Most lenders get the prop­erty val­ued in­de­pen­dently and they will pro­vide the loan based on the value in­di­cated by their valuer rather than the mar­ket value as per­ceived by you. Gen­er­ally, the val­u­a­tion as de­ter­mined by the lender’s valuer is sig­nif­i­cantly lower than the mar­ket value as per­ceived by you, hence the loan amount gets re­duced. Is it pos­si­ble to get a home loan of ₹ 15 lakh with an an­nual in­come of ₹ 3 lakh?

—Jiten Rao As a thumb rule, if you are be­low 40 years, you should be el­i­gi­ble for around 4 to 4.5 times your net an­nual in­come sub­ject to a max­i­mum of 90% of the agree­ment value of the prop­erty as a home loan. So, if the agree­ment value of the prop­erty is ₹ 17 lakh and you have no other loans, then you should be able to get a loan of around ₹ 13.50 to ₹ 14 lakh.

You will also have to pay the stamp duty and reg­is­tra­tion charges, as banks do not fund them. The over­all el­i­gi­bil­ity will be based on your in­come, your reg­u­lar out­go­ings and re­pay­ment track record.

How­ever, in or­der to en­hance your el­i­gi­bil­ity you can con­sider get­ting your earn­ing spouse (if mar­ried) or par­ents to join you as cobor­row­ers or al­ter­na­tively in­crease the ten­ure of the loan, if pos­si­ble.

The amount of home loan given is also de­pen­dent on the value of the prop­erty that you are buy­ing. The lender will get the prop­erty val­ued by its valuer and usu­ally prices es­ti­mated are much lower than what you are pay­ing for the proerty. Your con­tri­bu­tion then will go up. The cur­rent rate of in­ter­est on a float­ing rate home loan for a loan be­low ₹ 20 lakh is in the range of 10.15% to 10.25% per month.

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