Housing
finance is a boon for the potential investor who
want to have own house. The number of people who have ready
money with them to invest in property are few. Housing finance
companies provide assistance to customers for constructing
houses and /or buying houses or flats. Schemes are available
for both Indian residents and NRI's.
Who is eligible?
Anybody who can show proof
of steady taxable income viz., 1. Employees of
public and private sector undertakings, bank employees etc
2. Professionals/business men who file IT returns
regularly .
Income tax benefits
Tax benefits
for takers of Housing loan (as per Finance Bill.2000) 1. Straight deduction of interest upto Rs:1 lakh from
total income 2. Rebate of Rs:20,000/- u/s 88 for repayment of principal.
What is the maximum loan?
The
maximum loan available is 85% of the cost of the property.
It also depends upon the repayment capacity of the takers.The
amount of loan available depends on factors such as income,
age, qualifications, assets, liabilities, continuity of
service etc. The income of your spouse will also be considered
in deciding the quantum of loan.
Interest
rates
Varying from
12% to 18% on diminishing balance depending upon the amount
and the repayment period.
Repayment
period
Usually between
5 to 15 years by way of equated monthly installments (EMI).
For NRI’s it is 7 years.
What are
the formalities ?
First you have
to identify the property to be bought. Submit documents of
the property, approved plan and proof of income with copies
of your salary certificate/ IT returns.
Processing Time
It will take
2 hrs to 2 weeks to complete the formalities once you submit
the application complete in all respects. Some companies charge
processing fee of 0.5% to 1%.
Securities
to be provided
1. Mortgage
of the property to be financed, by deposit of title deeds.
should be clear and free from mortgage, loan or litigation. 2. Personal security from one sound & solvent guarantor 3. LIC policy or FD receipt as collateral guarantee
Who
are the players ?
Birla
Home Finance Ltd ,Canfin Homes GIC Housing Finance, HDFC,
LIC Housing Finance, SBI Home Finance, etc are some of the
major players in the market. Banks also have entered this
field.
