Month: July 2012

Who are eligible for home loans

Banks have specific conditions on home loan eligibility. There are multiple factors which come into effect when a customer applies for a housing loan. A housing loan is a secured product which takes customer age, employment and property into consideration. The min age for applying a housing loan is 21 years amd maximum cap for salaried private sector and public sector is 58 years and for central Govt. employees it is 60 years and for self employed people it is 65 years. Customer should have a min of 2 years continuous work experience. The min annual salary or Gross Earnings should be 2.4 lacks. People who have past credit history with satisfactory repayment track will have a added advantage. Customers with card settlements and loan over dues are straightly gets rejected for a home loan. Property should have clear and marketable title with all relevant documents in original. Banks will verify all the details mentioned in the application form and issue the home loan post satisfactory verification of details mentioned in the housing loan application form.

Why banks ask for loan repayment tracks

Any customer who applies for a home loan with pre owned liabilities will have the experience of banks asking for the repayment track of existing liabilities. It is usually for the reference to the bank that how the customer is repaying his/her existing loan or there are any outstanding EMI’s or over dues on the existing loan. The repayment tracks reflect the banking habits of customer which supports the existing bank in giving the loan. As home loans have a lengthy repayment periods, banks take his existing loan EMI’s into consideration for the calculation of eligibility and for the calculation of home loan EMI to ease the customer in monthly repayment. If the loans are below 6 months to closer of tenure or the customer is interested in closing the loan for availing the home loan then banks do not consider the existing loan for the sanction of home loan. Banks reserves the right to ask for additional documents if needed.

Why banks reject Home Loans applications

“All loans at the sole Discretion of the bank/financial Institution” a line which highly affects home loan customers who apply for a loan with banks/financial institutions. Banks have different reasons to reject a file and every customer should be aware of these facts. While applying for a home loan a customer signs banks application form which state that the customer accepts all banks terms and conditions and he will obey all the terms to avail that loan. Banks will verify all the details mentioned in the application form about his employment, past repayment tracks records and CIBIL statements. Banks will also check the legality of the property and the original documents of the property before funding. If banks feel that any information stated in the application form or any documents submitted to the bank does not comply with banks policy and terms that banks have the right to reject the home loans applications of customers.

Home loan inquiries increased 18% in Q1 2012: CIBIL

25 Jul 2012, ET Bureau.

AHMEDABAD: Home loan inquiries increased by more than 18% in Q1 2012 compared to Q1 2011 indicating surging demand for home loans, according to Credit Information Bureau (India) Ltd (CIBIL).

CIBIL Home Loan Trends indicate higher ticket size of home loans being disbursed pan-India. Near 48% of the total home loans sanctioned in metros in 2011, had a ticket size of more than Rs 20 lakh while those in Ahmedabad, Pune, Kanpur, Lucknow, Chandigarh, Jaipur were 24%.

Home loans with ticket size of less than RS 50 lakh increased to over 12% in 2011 against 7% in 2007. Home loan inquiries have doubled since 2007, CIBIL report indicates.

CIBIL study indicates that more than 88% of new home loan borrowers in 2011 had a credit score of 750 and above. Higher the CIBIL TranUnion Score that ranges from 300 to 900, better chances of getting loans sanctioned, said Arun Thukral, MD, CIBIL. “Closer is a consumer’s score to 900, more confidence banks have on the individual’s ability to repay,” he reasoned.

Banks and financial institutions have started accessing CIBIL reports and the credit score before sanctioning a loan.

Why banks take co-applicant in Home Loan

Most of the banks take a co-applicant in home loans application. The co-applicant should also submit all this personal documents like ID proof, Age proof and Residential proof and sign the application form. If the income of the co-applicant is considered then the Income documents also are submitted to the bank. By signing the home loan application form and the home loan facility agreements at the time of disbursement, the co-applicant declares and accepts the liability of the home loan even if his income is not considered. At any moment during the tenure if the applicant is not able to pay the dues then banks make co-applicant as liable to repay the housing loan dues on behalf of applicant. This will be a big concern to applicants whose co-applicants are non-working or retired people. To secure them from this liability the applicant can go for home loan without any co-applicant or opt for Home loan linked life Insurance which covers Home loan liability incase if any risk occur to applicant or some insurances provide the option of paying three EMI’s of the home loan to ease from the burden in typical times once in the tenure.

Why home loan should be covered with an Insurance

Every home loan providing bank or financial institution is making home loan linked life Insurance mandatory to each and every customer even though they are enoughly covered by other insurance companies. It is a good step towards securing the customers life while securing their funding. But most of the customer’s who go for home loans are not interested in going for a home loan linked insurance. It is a good product where in the customer will pay the single premium and gets covered for the entire home loan tenure and the greatest point is banks or financial institutions are funding the premium amount also. The Product covers all sorts of risks which a normal insurance covers and the outstanding loan amount will be cleared directly by the insurance company and the original documents will be returned to the co-applicant in the home loan post closure of loan account. A single premium will cover the entire liability of the home loan and secures the dependable lives from the huge liability by giving them the house if memories.

Importance of Legal Scrutiny in Home Loan

All banks in the market which provide home loan to customer definitely do legal scrutiny of the property which they are mortgaging with the bank to avail the home loan. So what is legal scrutiny then? Legal scrutiny is a very simple process and important too which will be done by the property documents provided by the customer to the bank at the submission of home loan application. The legal documents comprise of Agreement of Sale, Past 15 Years registered link documents, Encumbrance certificate, Construction Approved Plan and Tax paid receipts. Banks gets all these documents scrutinized by a panel advocates and checks whether the seller has clear and marketable title over that property and cross check with the original documents and photocopies. Post satisfactory scrutiny of property documents bank will disburse the loan. It should not be taken as granted by customer if the bank clear the property legally and it is always suggested to cross check the legality of the property personally.

Tips for Filling the home loan application form

A corporate employee has got rejected his home loan application due to not filling the application form properly. This may be the if you neglect this. The Home loan application is very easy to fill. The first section will ask for applicants name, DOB, Address, Mobile No and Email address. The second section will ask for work details like your Employer Name, Address, Office Ph no, official mail id and HR Mail id. The third section concentrates on your income and liabilities and asks for regular income details along with variable pay that one receive annually and monthly, Liabilities remaining period monthly emi’s etc.  The next section of home loan application needs the details of your proposed property address, area, built up area, property cost and the seller details. The final section will ask you for 2 references who know you well along with their residential address and land line ph no’s. Please sign at the relevant places in the application form and get an acknowledgement from the executive. If acknowledgement is not available in the application form then take a photo copy of the application form duly filled by your own hands for future references.

Property Registration in Home Loan

It’s a very big worry to every customer on whose name they can register the property. Some customers want to register the property on their wife, mother or father’s name and will be in constant confusion whether it can be done or not. All banks do accept registering the property on mother, father or wife’s name if the sale agreement is made on their name only. It is mandatory they must be the co-applicants in the home loan application and should sign all the required documents for home loan and submit their proofs also. The amount to which the property should be registered depends on the agreement value and banks also. Some banks ask customer to register the property at market value or the loan amount availed and some banks allow customers to register the property at Govt. rates. The EMI amount will be debited from the applicant’s account but property can be on co-applicants name. At the same time applicant can take properties registered on mother, father and wife’s name as security to avail any mortgages loan from bank of financial institutions. Tax exemptions are applicable to home loans under section 80© of Income Tax Act.

CHD Developers to invest Rs 300 crore on Gurgaon housing project

16 Jul 2012, PTI.

NEW DELHI: Real estate firm CHD Developers Ltd today said it will invest about Rs 300 crore over the next four years to develop a housing project in Gurgaon.

Last week, the company had announced acquisition of a realty firm Empire Realtech — which has 12.34 acres on Dwarka Expressway, Gurgaon — for about Rs 100 crore. The land is licensed and has all approvals in place.

“We will develop a group housing project comprising 600 units on this land. We will target mid-income segment. The project will be launched by end of this year,” CHD Developers Chief Operating Officer Ravi Saund said.

Asked about the investment, he said it would be about Rs 300 crore, including land cost, and to be funded from internal accruals.

On the acquisition, Saund said: “Dwarka Expressway is fast becoming the next real estate destination and thus has been on our radar for growth plans”.

CHD had acquired 7,000 shares of Empire Realtech and the latter has become wholly-owned subsidiary of the company.

Many housing projects are coming up on Dwarka Expressway Sobha Developers, Assotech, Puri Construction, Chintels and ATS, among others, are developing projects in this area.

CHD also has projects at Karnal, Vrindavan and Haridwar. It is already constructing a project on Sohna Road, Gurgaon spread over 16.5 acres.

The company had posted a consolidated net profit of Rs 4.89 crore on a turnover of Rs 155.2 crore during 2011-12 fiscal.

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