1. What does an EMI mean?
EMI refers to the ‘Equated Monthly Installment’ which is the amount you will pay to us on a specific date each month till the loan is repaid in full.
The EMI comprises of the principal and interest components which are structured in a way that in the initial years of your loan, the interest component is much larger than the principal component, while towards the latter half of the loan, the principal component is much larger.
2. . What does ‘Own Contribution’ mean?
O‘ Own Contribution’ is the total cost of the property less Bank loan. Normally customer owns 20% of the Loan value and 80% of the loan value will be paid by the Bank loan.
3. . Do I get tax benefits on the loan?
Yes. You are eligible for tax benefits on the principal and interest components of your Home Loan under the Income Tax Act, 1961. As the benefits could vary each year…
4. . When do I start repaying the principal amount?
Repayment of the principal commences from the month following the month in which you avail full disbursement of your loan. Pending final disbursement, you pay interest on the portion of the loan disbursed. This interest is called pre-EMI interest.
Pre-EMI interest is payable every month from the date of each disbursement up to the date of commencement of EMI.
In the case of under construction properties, wherein you can choose the installments you wish to pay till the time the property is ready for possession.
Any amount over and above the interest which is paid by you goes towards principal repayment, thus helping you repay the loan faster. This is especially useful in case your disbursements are likely to be spread over a longer period of time.
5.
Ca. Can I repay my loan ahead of schedule?
Yes, you can repay the loan ahead of schedule by making lump sum payments towards part or full prepayment, provided funding is from your own source, in case of any bank take over charges apply
6. . How do I repay the loan?
For your convenience, there are various modes for repayment of the loan. You may issue standing instructions to your banker to pay the installments through ECS (Electronic Clearing System), opt for direct deduction of monthly installments by your employer or issue post-dated cheques from your salary account.
7. . In how many installments can you disburse the loan to me?
Once we receive your request for disbursement, we will disburse the loan in full or in installments, which usually do not exceed three in number. In case of an under construction property, we will disburse your loan in installments based on the progress of construction, as assessed by us and not necessarily according to the developer’s agreement. You are advised in your own interest to enter into an agreement with the developer wherein the payments are linked to the construction work and not pre-defined on a time-based schedule.
8. . Who will bear the Registration expenses?
Sale deed and Construction agreement registration has to be borne by the customer.
9. . Builder accepted the bear the Registration charges, however he refused to bear the Mortgage charges, do they?
Mortgage registration is between customer and bank and more over because of the loan from bank, customer is liable to register the document and give it to the bank, and this registration won’t be part of builder scope
10 . What does ‘market value’ of the property mean?
Market value refers to the estimated amount that is expected to be fetched on the property as per the prevailing market conditions.
11. Can I get a higher loan through my existing loan account to buy a new property?
Yes, you could go in for a ‘Home Conversion Loan’ whereby your existing loan (which you took to buy your current home) could be transferred to the new house with additional funds for the incremental cost of the new house, subject to your loan eligibility. This means you can move into your new home without having to go through the hassle of pre-paying your existing loan.
12. Can I apply for a loan to Bank to repay a Home Loan availed by me from another Bank / Housing Finance Company?
Yes, you can apply for a loan to us for repaying a Home Loan availed by you from another Bank / Housing Finance Company or even your employer. For more details on ‘Balance Transfer’ kindly contact the bank
13. When can I take disbursement of the loan?
You can take disbursement of the loan once the property has been technically appraised, all legal documentation has been completed and you have invested your Own Contribution in full.
14. Can I also avail of a Home Loan for Home improvements or a Home extension?
Yes! You can avail for any of the following:
• Purchase of a home.
• Construction of a home.
• Home repairs.
• Home improvements.
• Home extension
15. In case If I avail the loan without identifying the property and how long is this approval valid?
This in-principle approval is valid for 3 months to give you sufficient time to choose a flat/house of your choice.
1. . How long does it take to get my loan sanctioned?
Normally loan gets sanctioned in 4 weeks times provided you have all the documents in place.
17. Can I apply jointly with my spouse? Will both our salaries be taken into consideration for calculating the loan amount?
Yes, your salaries can be clubbed for the purpose of calculation of the loan amount. This can be done either when the property is jointly held with the spouse or the spouse stands as a guarantor. Thus, we ensure a great deal of flexibility in the entire exercise of financing your house
18. What security do I have to furnish?
Bank required the purchased property must be mortgaged before they release the funds
19. Can I prepay the loan? Are there any penalties?
Yes, you can prepay the loan at any stage. There is no pre-closure/ prepayment penalty applicable on home Loans.
20. If I have funds, is it still worthwhile to avail of a bank loan for buying a house?
It is generally advantageous to take a Housing loan as it would enable you to get tax exemptions. However, please consult your CA/ income tax advisor to know benefits/disadvantages in your specific case.
21. What are the tax benefits of taking an SBI Housing Loan?
Under the Indian Income Tax Act of 1961, resident Indians are eligible for certain tax benefits on principal and interest components of a loan. Under Section 24(1), interest repayment of Rs.1,50,000/- per annum qualifies for tax saving.
An added benefit under Section 80(c) on repayment of principal amount to the extent of Rs.1,00,000/- is also available on the same loan subject to compliance with conditions stipulated in the IT Act.
22. What is the minimum and maximum tenure for Home Loan ? Which is the best tenure to opt for ?
Loan tenures range from 5-20 years, and you need to choose your depending on factors like number of working years left, repayment ability and cash flow needs.
23. What is Fixed Interest Rate and Floating Interest Rate?
While fixed rate loans are those whose rates are fixed for the tenure of the loan, in case of floating rate loans, the rate is benchmarked to a retail lending rate of the lending institution and moves in tandem with it
24. Does the option of opting for Fixed or Floating Interest rate dependent on marketing dynamics ?
You should opt for a fixed rate loan only if interest rates in the economy are either rising or have stabilized. They are also useful in the tenure is small, such as five years.
25. What are the various types of fees charged by the banks ?
The fees charged by a lending institution for processing loans have one or more components. However, the components to be charged are at the discretion of the banks and varies from time to time. We are providing the list of components that generally falls under the preview of lending fee -
Processing and administrative charges:
They range between 0.25-0.5 per cent of the home loan amount sought from the home loan provider. Mortgage fee. The charge is usually 0.5-1 per cent per annum of the property value and is in the form of stamp duties and mortgage charges for the property value that is being offered as collateral to the lender.
