I need a home loan and my salary is ₹ 32,500. I also earn some incentives. What are the options available to me?
— Sharad Ahuja Lenders normally consider the incentives if they see that you have consistently earned sizeable amounts (of incentives) over consecutive quarters in the past. However, there might be variations in terms of the exact amount. If this is the case, your incentives shall most definitely be taken into account while calculating your loan amount eligibility.
On the basis of ITR/Form 16 of the last two years, you can get up to 4 to 4.5 times of your annual gross income (that includes incentives and other variable income components) as a home loan or up to maximum of 80% (90% for loan amount below ₹ 20 lakh) of the agreement value of the property as a home loan. The overall eligibility will be based on your income, your regular outgo- I availed a home loan from a private bank in December 2012. The variable rate of interest was 10.5% and the EMI started from February 1, 2013. However, before my first EMI, RBI had reduced the rate for new loans to 10.25%. Hence, I did not get the benefit. The same bank increased the ROI to 10.75% in September 2013 without any intimation and consequently my 20year long EMI has now increased to over 21 years.Can the bank do this without informing me and will my rate of interest be reduced as per the recent rate cut by RBI?
— Sagarika Dhulia The changes in RBI policy rates do not automatically impact changes in the lender reference rates.
It is a known fact that lenders are hesitant to reduce the base rate (BR) when interest rates fall and hence the consumer rarely gets the benefit when the interest rates are reduced. To say the least, this does not happen immediately.
However, at any given point of time, if you feel that the rate of interest being charged on your loan is higher as compared to the prevailing market rates or the rate being offered to new customers, you can transfer your existing loan to another lender.
You will need to have a good track record of payment of your EMIs in order to secure an offer from another bank that will replace your existing loan. No prepayment charges are payable on transfer of a floating rate home loan for banks and housing finance companies presently.
However, you may have to pay some processing fee to the prospective lender. Remember not to pay processing fees plus legal fees and valuation fee more than 0.50% of the loan amount or ₹ 10,000/ (whichever is lower) plus service tax. I want to take a home loan in which I want my wife to be the co-applicant (50:50). What documents are required to prove that my wife and I are paying EMI in the same ratio? Will it be mentioned in the loan documents?
— Rohan Mandar In case of a jointly owned property and a joint loan, each of you can claim tax benefits to the extent of your respective shares in the loan. In case the share of each person is not defined in the property agreement, you can record the same by way of a separate agreement to specify a certain percentage. However, this is not required to be mentioned in the loan documents.