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.