Asian Share Market, Asian Stock Market

Basics of Home Loan

To own you dream house is one of the major investment and financial decision. In India, banks offers 85%-90% cost of your house as. Following are few basic factors that come into process of taking a home loan:

Source of Income to apply for home loan

Applicant should have demonstrable source of income with no default. Applicant should not be burdened with other high interest debts which results difficult repayments of home loan.

Tax Benefits from home loan

Applicant can avail tax rebates which becomes important parameter to make investment in the property. Applicant can avail rebate up to Rs.1 lac on principal amount on home loan as per section 80C of Income Tax Act. Applicant can also avail tax rebate up to 1.5 lacs on the interest payable on the home loan as per Section 24(b) of Income Tax Act. This rebate is applicable if the property is self occupied.

Choose Lender

Applicant should collect information regarding interest rates, penalties and other charges and fees levied by the various lenders providing home loans. Find out the best deal by performing market analysis as taking a home loan is one of the most critical decisions. Applicant should verify twice before taking decision on home loan as it affect your credit rating.

Funds to borrow

It is advisable to borrow the lowest amount if possible. You should cash your investment and other resources before deciding the funds to borrow.

Home Loan Process

Applicant has to fill up the formal loan application form providing personal, family, residential, employment and earning information with demonstrable proof along with property information for which you are going to take home loan. This information is verified by the bank or financial institution. It also verifies you credit history and repayment capacity of the loan. It evaluates your application after personal interrogation. A offer letter containing the detailed information of the applicant is prepared after completing legal formalities. The documents are signed by both the parties and thereafter actual disbursement takes place once the post dated cheques are submitted to the bank or financial institution.

Documents Required

Applicant has to submit identification proof, address proof, age proof, employment details and proof of income in the form of last three months salary slip, bank statement of last six months along with copy of income tax returns to the bank or financial institution.

You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.