I want a home loan for ₹ 50 lakh for a property for which the agreement value is ₹ 1.4 crore. The bank says I will have to bring in margin money equivalent to 20% of the property value that is ₹ 40 lakh. I have another property of ₹ 1.1 crore. Should I take a loan against this property?
—Vivek Sharma If the agreement value of the property you are going to purchase is ₹ 1.4 crore and you wish to avail a loan of ₹ 50 lakh, then you need not worry about the margin money because you are going to take a loan equivalent to 35% of the agreement value of the property (subject to bank’s valuat ion of thproperty), which is far below the requirement of maximum loan amount bank can finance.
Your eligibility to get the loan will depend on your regular income and outgo- ings, any existing loan being serviced, etc. If your present income is sufficient and you have many years of working life left, and a good credit history, you can easily get a home loan. If you are taking a loan to buy a property, it is advisable to take home loan instead of loan against property.
Home loans are cheaper than loan against property and are available for a longer tenure (20 to 30 years) against loan against property, which is available for 5 to 15 years.
Lenders finance upto 80% (90% for flats valued less than ₹ 20 lakh) of property value as home loan vis-a-vis 50% to 60% for loan against property. In case you are unable to get a home loan then take the loan against property. .
If I become a guarantor for a home loan of a relative (₹22 lakh), is it advisable or is it risky?
—Soumitra Dasgupta Guaranteeing a loan is as good as taking a loan for yourself and then lending it to the main borrower. It impacts your ability to get another loan as a part of your income is already tied up in servicing the existing loan. Thus, a bank treats your guarantee as if you have taken the loan yourself and hence the availability of income to service another loan is affected. It affects your Cibil score. In case your relative defaults in repaying the loan, it will hurt your credit history too.
I purchased a property under construction in February 2013 for ₹ 73 lakh. I have paid ₹ 20 lakh to the builder. Further installment payments are to be made now. Do I deduct TDS from each installment? Builder claims that TDS on ₹ 73 lakh to is be deducted from final payment at the time of transfer/registration and not from interim installments. Please clarify.
—Tanveer Raheja The requirement to deduct tax is on the amount that is being paid after June 1, 2013. So you will have to deduct TDS on ₹ 53 lakh and not on ₹ 73 lakh. As regards the time of deduction of TDS contention of your builder is not right. You have to deduct 1% from every payment that you make to him. These are absolutely clear provisions in section 194 -IA that provide for deduction of tax at “the time of credit of such sum to the account of the transferor or at the time of the payment of such sum in cash or by cheque or draft or any other mode, whichever is earlier....”.