Home Loan
The Journey to your Dream Home starts here !
What is Home Loan ?
Any amount of money borrowed from a bank or an NBFC for the purchase, expansion, or construction of a home at a certain fixed or floating rate of interest, payable in EMI or Equated Monthly Instalment over an agreed period, is termed as a Home Loan. The property remains as security with the lender for the term or period of the loan. You may avail a home loan for purposes such as:
Purchase of Residential Property
Construction of house
Home renovation
Balance transfer
Purchase of land/plot
Different Types of Home Loan for Your Various Needs
Purchase of apartment
You can get a home loan for a residential apartment complex that is under construction or already ready to move in.
Purchase of bungalow/independent house
Get a home loan to purchase a ready-to-move-in or under construction bungalow or independent house.
Purchase of land/plot
You can buy a vacant plot for construction. Some banks insist that you must begin constructing your property within one year of purchasing the land.
Pradhan Mantri Awas Yojna
The plan of the Government of India to allow every Indian Citizen an opportunity to own a home in India via the drafting of the Credit Linked Subsidy Scheme or CLSS is known as Pradhan Mantri Awas Yojna. Under the PMAY, a citizen can avail Home Loan from almost all banks allied with this scheme.
Home renovation
These loans are for the improvement or renovation of an existing house or apartment.
Construction of house
You can avail of a loan for the construction of property if you have permission from the municipal corporation and an approved building plan.
Balance transfer
Transfer an existing home loan to another bank or NBFC that gives you better home loan eligibility criteria and interest rates.
NRI Home Loan
If you are a patriot, a Non-Resident Indian, and wish to own residential property in India, NRI Home Loan is your choice. Though the formalities for application may be a little different, you can still get a loan up to a certain percentage of your property value.
How to Apply for a Home Loan?
Fill Application Form
Enter your details in the Home Loan Application Form and furnish your essential documents as asked to further the process
Free Consultancy
You will receive call from Megamind loans Home Loan Specialist team, They will give full details and offers of different banks & NBFC.
Bank Process
as per your choice, your application get processed in desired bank for further verification and legal processing of documents.
Approval & Disbursal
After approval, your Home Loan Amount will be disbursed to your Bank Account
Features & Benefits of Home Loan
Capital appreciation
Sense of accomplishment
Home loan top up and balance transfer facility
High loan amount of up to 5 Crores (can be more in some cases)
Repayment holiday facility
Fixed, floating, and hybrid rates of interest available
Tax benefits on interest and principal components
Zero prepayment charges
Long repayment tenure of up to 30 years
Makes it easy to purchase a new or resale house/apartment/plot, house construction, or even renovation of an existing house.
Loan available as term loan and overdraft
Fees and Charges for Home Loan
You should be ready to pay the processing fees for your housing loan. Some banks charge less processing fees, but may make up for that somewhere else. On the other hand, some banks and financial institutions consolidate their charges and include them in the processing fees. Let us look at some common charges you will most likely incur when you apply for home loan.
Upfront fee for processing
Many banks charge an upfront fee for processing your application. This is usually in the range of Rs. 3,000 to Rs. 5,000. This is a non-refundable fee, even in case the bank rejects your loan application. In case they sanction your loan, they adjust this fee in their regular processing fees.
Processing fee
This amount ranges from 0.20% to a maximum of 2% depending on your employment status. Salaried employees incur a smaller fee whereas self-employed professionals and business persons have to pay more. Some banks do have a uniform rate. Note that you have to pay GST @ 18% on this processing fee.
Valuation charges
Many banks charge for the valuation of the property. They have independent evaluators on their panel. These banks have a fixed structure of payment. Some banks insist that the customer pays to the bank whereas some of them include this amount in their processing fee structure.
Legal scrutiny charges
Legal scrutiny of the property is mandatory. The financing bank has to ensure that you get a clear title to the property so that the mortgage holds well in law. Therefore, they have a panel of legal experts who carry out the search for a period of 30 years. You need to supply the property documents to these advocates to allow them to do the needful. Some banks ask the customer to pay the advocates separately whereas many banks include these charges in their processing fees.
Mortgage registration charges
The prime security for the home loan is an equitable Most of the states in India require you to register the equitable mortgage in the bank's favour. Under such circumstances, you incur stamp duty and registration charges. The equitable mortgage does not attract stamp duty in some states like Rajasthan. However, in states like Tamil Nadu, there is a stamp duty of 1% of the loan amount subject to a maximum of 25,000. In addition, you have to pay 5,100 as registration charges. Be aware of these additional expenses when you avail Home Loan.
Pre-EMI charges
Some banks have the system of charging pre-EMI charges. Ascertain these charges beforehand.
Insurance
Taking out insurance for the property is mandatory. At the same time, many banks and financing companies bunch a lot of their products like loan insurance, Mediclaim family floater policies, accident insurance, and critical illness cover, etc along with the loan. They provide the financing for the premium as well. Of course, you have to repay the same in your EMI. In a way, it is good to have these insurance policies because life is uncertain. In case something happens to the breadwinner and the principal borrower, the insurance can take care of the liability. However, other than the property insurance, all the other policies are optional. You can refuse to take them.
Home Loan Eligibility
Various factors go into the determination of your Home Loan eligibility. The basic rules for salaried people and self-employed people are the same. Some banks stipulate a higher take-home pay percentage for self-employed persons.
Your current income
Salaried employees can submit salary slips for the last three months and furnish a bank statement for the past six months where their salary is credited. Self-employed professionals should submit the statement of accounts for one year where they receive the credits for the services rendered by them.
Continuity of employment/business
Salaried employees can rely on their income tax returns, Form 16, Form 26AS, etc to display their continuity of employment. They can also show a statement of the Provident Fund account to establish the links. Self-employed businessmen and professionals can furnish the income tax returns along with other financial statements like balance sheet and profit and loss statements. They can also furnish copies of invoices raised by their clients.
Current obligations
It is possible that an applicant might have pre-existing personal loans, vehicle loans, and other loans for which they might be paying instalments. You have to account for these instalments as well while calculating Home Loan eligibility.
Credit history
he repayment track record of the applicant is of utmost importance. Every bank or financial institution is a member of CIBIL or another credit bureau. These bureaus keep track of the loan activities of every borrower. Based on this information, they generate your credit history profile and quantify the same by generating your credit score. This is a number ranging between 300 and 900. The higher your score, the better are your chances of getting a loan. Naturally, it goes without saying that defaults, frequent requests for loans or missing payments can pull down your credit score. A score of 600 and above is considered fair for determining HL eligibility.
Value of the property
The value of the property you purchase is important. The financing bank needs to determine the cost of the project it is going to finance. Banks usually finance up to 75% - 90% of the value of the property (also known as LTV or Loan to Value Ratio) with the balance being your contribution or margin as they call it.
Legal position
The prime security for any home loan is a mortgage of the land and building they have financed. You have to create the mortgage and register the same with the respective registering authorities. In order to do so, you must be legally empowered to create the mortgage. Hence, banks and financial institutions insist on a legal scrutiny report from their panel of advocates who carry out a search for the previous 30 years to establish the ownership chain.
Age of the borrower
The minimum age of the borrower at the time of home loan application should be 21. The age at the time of maturity should generally be 65 years. Some banks stretch this limit to 70 years.
Home Loan Documents Required
Every customer has to satisfy the Know Your Customer (KYC) norms stipulated by RBI. You have to provide the documents relating to your KYC, employment, business, and income
Identity Proof
- PAN Card
- Aadhar Card
- Voter ID
- Driving Licensee
- Passport
Address Proof
- Registered Rent agreement
- Aadhar Card
- Driving License
- Lease agreement
- Passport
- Latest Gas or electricity bill
Other documents:
- Loan application form duly filled in
- Photographs
- Signature Proof
Property documents:
- Copies of all property documents that can establish the chain of ownership for the past 30 years.
- Encumbrance certificate for 30 years
- Property tax paid receipt in case you reside in the property being mortgaged (usually when you apply for Home Loan Balance Transfer).
Income Proof Documents:
- Salary slips for the last 6 months in case you are a salaried employee (In addition, you can provide IT returns for the past 3 years along with Form 16).
- IT returns for the past 3 years in case you are self-employed (Some banks accept 2 years IT returns as well).
- Statement of A/c for the past 1 year where your salary is credited (in case of salaried people).
- Profit and Loss statement and Balance sheet for the last 2 years in case of self-employed persons.
- Sales tax, GST registration certificates, if applicable.
- Partnership deed in case of partnership firms (if the applicant is one of the partners).
- Certificate of Incorporation in case of limited companies(if the applicant is one of the directors).
Documents Required from Non-Resident Indians (NRIs) Applicants
- Employer identity card
- Valid passport and visa (attested copy)
- Address proof with the current overseas address
- Copy of Continuous Discharge Certificate (CDC) for merchant navy employees.
- PIO card issued by Government of India (for PIOs)
- Documents must be attested by FOs/Rep. Offices or Overseas Notary Public or Indian Embassy/Consulate or officials of Branch/Sourcing outfits based in India.
- Home loan application – completed and duly filled
- 3 passport size photographs
- Identity proof (any one): PAN/ Passport/Driving License/Voter ID Card
- Residence proof (any one): Recent copy of Utility Bills/Piped Gas Bill/Passport/Driving License/Aadhar Card.
Income Proof Documents for NRI
For Salaried
- Valid work permit
- Employment contract with an English translation (if it’s in another language) duly attested by employer/consulate/Indian foreign office/Embassy.
- Last 3 months’ salary certificate or salary slips
- Last 6 months’ bank statements showing salary credit
- Latest salary certificate or salary slip in original
- Last year’s Individual Tax Return (duly acknowledged copy) except for NRIs/PIOs located in Middle East countries & Merchant Navy employees.
For Self-employed
- Business address proof
- Income proof in case of self-employed professionals/businessmen.
- Last 2 years’ balance sheet and P&L accounts (audited/C.A. certified).
- Last 2 years’ Individual Tax Return except for NRIs/PIOs located in Middle East countries
- Last 6 months’ bank statements of overseas account(s) in the name of individual as well as company/unit.
Home Loan EMI Calculator
When you decide to apply for a Home Loan, you need to assess your repayment capability so that you don’t end up in any financial problems and can find the cheapest home loan. Home Loan EMI Calculator is a useful tool in this regard for calculating the EMI (equated monthly instalment) of a Housing Loan. It is a free of cost user-friendly tool that can be used anytime and from anywhere to calculate the monthly instalments you will have to pay. The Home Loan EMI Calculator requires you to enter a few home loan details to give you an accurate result, such as loan amount, interest rate, and repayment tenure.
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