Bank’s permission needed to sell a loan-funded house

I am planning to partially withdraw from my deposit from the provident fund for my home loan’s initial payment. Is it still taxable? How can I withdraw it specifically for home loan purpose? Raghavendra

Bengaluru

Provident fund is meant to be your retirement fund and hence should not be touched as far as possible. In any case, withdrawals from the EPF account are available only after five years.

As per the provisions of the EPF Act, withdrawals or loans from the EPF account is allowed for acquiring the dwelling site or house. You need to apply for this using a specific form, which is available at www.epfindia. com/downloads_forms.ht m. The money withdrawn from EPF or recognised provident fund is not taxable if it is done after five years of membership in the fund. I am a 35-year-old salaried man and my younger brother is into business. My mother wanted one of us to buy our home, which is on her name, and use the loan amount to build another house for the other. I would like to buy my mother’s house, but shall I be eligible to apply for a home loan from banks? B. Sudhir Reddy

Hyderabad

You can get a home loan to buy your mother’s property if your income can justify the loan. The lender will closely examine the value of the property since it is a transaction between related parties.

The bank will also get the property valued by its valuer and may give you the loan based on such valuation in case the valuation is lower than the agreement value between you and your mother.

I had bought the house that I live in with bank finance. I still need to pay instalments for four more years. Now I am planning to buy a bigger house for which also I need to take another home loan. Before that, I want to sell my first house to part fund the new purchase. Is it mandatory to clear the loan amount to the existing lender before selling the house? Rajan Varma

Chennai

Yes. You need to pay the outstanding loan amount before you can sell the property. In case you want to sell the property, you will need the bank’s consent for the same. This consent letter will typically provide the amount, on payment of which the outstanding loan will be fully paid off and the original documents shall be released.

This amount includes the prepayment charge (in case of fixed rate loans only), and should list the documents held by them that will be released on payment of the amount. This amount mentioned in the certificate is typically calculated as on a future date, to enable time for the buyer to arrange the payment. After the payment of all dues, the bank will return your original documents and issue a loan closure letter indicating that there is no outstanding amount to be paid. Please make sure you get the nodues certificate to obviate any issues in the future. The buyer can make payment of the balance sum on the receipt of the original documents from your lender. I have recently moved to Mumbai from Gujarat. Please clarify, if I can buy insurance for my bike in Mumbai, without transferring the vehicle to Mumbai. Ankur Trivedi

Mumbai

There should not be any problem for claims in Mumbai. But, it is advisable to transfer the bike and register it with current state’s RTO. You also need to notify the insurer about it, if you decide to settle down in Mumbai. Harsh Roongta is CEO of Apnapaisa.com. You can send in your queries to movingmoney@deccan

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