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HT Estates - - HTESTATES - Harsh Roongta

My hus­band’s salary is ₹ 6 lakh per year. We want to buy a house for around ₹ 60 lakh. Which bank will­give us a loan?

— San­git Sri­vas­tava The quan­tum of loan which your hus­band can get is de­pen­dent on his an­nual in­come and banks will not lend him any­thing above this amount. Also, the value of the prop­erty is sig­nif­i­cantly higher. If he is less than 40 years of age, he should be el­i­gi­ble for around 4 to 4.5 times of his gross an­nual in­come as loan, pro­vided he has no

other loan to ser­vice. I want to buy a house with my cousin. Will banks give us a joint loan and is it pos­si­ble for us to get the prop­erty reg­is­tered separately?

— Narayan Swami There is no re­stric­tion as to who can jointly own a prop­erty. As far as join­ing as a cobor­rower in a home loan is con­cerned, only a spouse or a close rel­a­tive such as sib­lings, par­ents or chil­dren can be per­mit­ted by banks to get joint loans. It is, there­fore, un­likely that cousins want- ing to jointly own a flat can get a home loan. Se­condly, no sin­gle prop­erty can have two sep­a­rate reg­is­tra­tions un­der dif­fer­ent names. My wife is cur­rently a house­wife but may take up a job in the fu­ture. Can I in­clude my wife’s name in the loan ap­pli­ca­tion later and can we both pay to­gether to the bank in or­der to avail tax benefits?

— Sr­ishti Shah In case your wife is not a coowner to the said prop­erty, she can­not claim tax benefits. If you de­cide to in­clude her name as a co-owner of the prop­erty later, that will have stamp duty im­pli­ca­tions. To add her name as a loan co-bor­rower will also en­tail closing the cur­rent loan where you may be the sole owner and bor­rower and file for a fresh loan ap­pli­ca­tion. How­ever, if you have not yet pur­chased the prop­erty and availed the loan, you can still make your wife a coowner and a co-bor­rower. I had taken a home loan of ₹ 22 lakh in 2005 at an in­ter­est rate of 8% for 20 years. I am cur­rently pay­ing an equated monthly in­stall­ment of ₹ 19,000 per month. I have been claim­ing tax ben­e­fit on my home loan till date. Now I have an out­stand­ing of ₹ 10 lakh which I can pay right away and close the loan. Is it ad­vis­able to close the loan or should I con­tinue the loan and avail tax benefits?

— Daksh Ahuja The de­ci­sion to pre­pay the ex­ist­ing home loan de­pends on sev­eral fac­tors. First and fore­most are the in­come-tax benefits avail­able on the ex­ist­ing loan. You should take into ac­count the post tax re­turns avail­able on al­ter­nate in­vest­ment op­tions and com­pare it against the post tax in­ter­est cost.

Se­condly, if you are on fixed rate of in­ter­est and taken from a bank, you may have to pay a penalty of around 2% (ex­clud­ing ser­vice tax) on fore­clo­sure of loan.

Please note that be­fore you opt to pre­pay your home loan, it is al­ways ad­vis­able to pay off all other debts on which you are pay­ing higher in­ter­est be­cause the rate of in­ter­est on such bor­row­ings is nor­mally higher than home loans.

Also keep some funds avail­able to meet any fi­nan­cial con­tin­gen­cies. I am plan­ning to take home loan on my wife’s name be­cause my Cibil record is bad. My wife is work­ing and get­ting a salary of ₹ 28,000 per month for the last three years. Can she get a home loan alone and if yes, how much loan will she get? And how can I im­prove my Cibil score?

— Radha Sawh­ney With an in­come of around ₹ 28,000 per month, your wife is el­i­gi­ble for a loan amount of ₹ 12 lakh at the rate of 9.90% to 10.25% per an­num for of 20 years.

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