CHEQUE BOOK

HT Estates - - HTESTATES - Harsh Roongta

I am a teacher in a UP gov­ern­ment school and my monthly in­come is ₹ 29,000. Can I avail of a home loan? Is there a limit to the amount I can bor­row?

— Vi­neet Chaud­hary Nor­mally len­ders grant a home loan of up to a max­i­mum of 80% (90% for loan amount below ₹ 20 lakh) of the agree­ment value of the prop­erty as a home loan. You will also have to pay stamp duty and reg­is­tra­tion charges (if your prop­erty cost ex­ceeds ₹ 10 lakh), as banks do not fund th­ese charges. The over­all el­i­gi­bil­ity will be based on your in­come, your reg­u­lar out­go­ings and re­pay­ment track record.

Dif­fer­ent banks pre­sume dif­fer­ent por­tions of your in­come as avail­able for pay­ment of EMIs for loans. It varies from bank to bank and there is no stan­dard norm/for­mula. But nor­mally the bank will as­sume that around 40% to 45% of your net salary is avail­able for pay­ment of EMI to serve all

the loans.

With your in­come, you should be el­i­gi­ble for ap­prox­i­mately ₹ 11.75 to ₹ 13.25 lakh at the rate of 9.75% for a 20-year loan ten­ure. You can also en­hance your el­i­gi­bil­ity by mak­ing your earn­ing spouse/par­ents to join you as a co-bor­rower or in­crease your loan ten­ure.

I have booked a flat that costs around ₹ 13 lakh and my loan amount is ₹ 11 lakh. This is an under-con­struc­tion pro­ject and will take around two years to com­plete. Since my EMIs will be­gin after the unit is handed over to me, will I have to pay pre-EMI in­ter­est now? The builder claims that I will have to pay an in­ter­est of only ₹ 200 to

₹ 300 per month un­til I get the keys

to the house.

— Sid­dharth Gupta The builder may be mis­lead­ing you. On ev­ery dis­burse­ment made to the builder di­rectly by the bank you will need to pay pre-EMI in­ter­est at the rate pro­vided in the agree­ment. If the dis­burse­ments are high, the pre-EMI in­ter­est will be sig­nif­i­cant and cer­tainly not ₹ 200 or

₹ 300 as has been claimed by the builder.

Pre-EMI is the sim­ple in­ter­est payable on a home loan taken for an un­der­con­struc­tion prop­erty where the loan dis­burse­ment is linked to the con­struc­tion plan. It starts from date of dis­burse­ment of the loan. This amount does not have

the prin­ci­pal com­po­nent. The ac­tual loan re­pay­ment as EMI will start only when the en­tire loan amount is dis­bursed to the builders.

You have the op­tion to tell the bank not to dis­burse the en­tire amount be­fore com­ple­tion of the pro­ject and the bank will ac­cord­ingly dis­burse the money par­tially to the builder as per the terms of the con­tract be­tween them.

Please note that the bank does not guar­an­tee timely con­struc­tion of prop­erty and it is your li­a­bil­ity if the con­struc­tion is de­layed.

I am plan­ning to buy land, Can I ap­ply for a home or flat loan for this or can I ap­ply for a per­sonal loan? Is there a bank that of­fers home loans for plots? — Sni­gadh Mehra You can get a plot loan based on your in­come and the ti­tle of the prop­erty. Plot loans are more re­stric­tive and avail­able for pur­chas­ing non-agri­cul­tural plots bought from statu­tory au­thor­i­ties or ap­proved de­vel­op­ers only. Nor­mally, len­ders will not finance more than 60% to 65% of the to­tal cost of the plot and the re­main­ing 35% to 40% has to come from your own sources. Also plot loans are more ex­pen­sive.

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