SBI Housing Loan and Documents Required

SBI Housing Loan becomes the most demanding home loan across the banking
sector in India and you will never regret if you have taken housing loan from State
Bank Of India(link is external). Other banks have very attractive offers for housing
loan, once you have availed one of those home loans, there will be a day that you realize
"I could have at least gone through the details of SBI housing loan".

There is a saying among the home loan takers "Upto loan sanctioning, other banks are
good; after sanctioning, SBI is good". It is really true when hidden charges and penalties
come into force during the repayment period of other banks. Here we look into
the features, eligibility requirements, loan amount
disbursementt,documents required, etc. of SBI Home Loan. You may read SBI
Home Loan FAQ for clarification related to this financial product.

SBI Housing Loan Features

Purpose of SBI Housing Loan

Purchase a plot of land(link is external) for purpose of construction of house

Purchase / construct a new house / flat(link is external)
Purchase an existing (old) house / flat or extend an existing house (link is
external)
Repair or renovate an existing house / flat
Furnishings / consumer durables as part of the project cost
Reimbursement of investment made from own resources during the preceding
twelve months for purchase /construction /repairs /extension of house
Loans for more than one house may be granted to an individual provided he / she fulfills
the income criteria as also EMI / NMI ratio after netting off the repayment obligations
of the existing loans and subject to satisfactory conduct of existing loan(s) for a
minimum period of one year.
Takeover of SBI Home Loans availed by an individual borrower from other banks /
financial institutions may be considered under certain circumstances after strictly
following the procedure laid down.

Eligibility for SBI Home Loan

Minimum age: Individual(s) over 18 years of age with steady source of income,

including persons engaged in agriculture & allied activities(link is external).

Maximum Age: Maximum age limit for a Home Loan borrower is fixed at 70

years, i.e. the age by which the loan should be fully repaid, subject to availability of
sufficient, regular and continuous source of income for servicing the loan repayment.
Sanctioning authority is, however, left with discretion to sanction loans to individuals
above the age of 70 years, provided son / daughter / spouse, who is a legal heir and
below the age of 50 years, with sufficient income for servicing the loan repayment,
joins as co-borrower / guarantor. Loan repayment in such cases should be made
through a joint deposit account / current account in the names of all the joint
borrowers / guarantors.
Under Platinum Age Limit Scheme
The maximum age limit is raised from 70 years to 75 years subject to fulfillment of the
following conditions:
1. Estimated rental value of house forms at least 80% of repayment (i.e. EMI).
2. Minimum margin of 30%. Borrowers above the age of 55 years under the Platinum

Age Limit scheme 2 should be persuaded to include their spouse as a co-borrower and
age of the younger of the borrowers may be taken for fixing the repayment period
irrespective of the income of the spouse.
No. of Co-Borrower: Restricted to maximum 3 including

spouse/children/parents/siblings. However, AGM [Region] / AGM (Branch) can relax

maximum no of co borrowers provided the property is registered in the joint names of
all the borrowers and loan repayment is made through an account with us in the joint
names of all the borrowers.

SBI Home Loan Amount

Actual loan amount will be determined taking into consideration such factors as
applicant's income and repaying capacity, age, assets and liabilities, cost of the proposed
house/flat etc. To enhance loan eligibility you have option to add:

Income of your spouse / your son / daughter living with you, provided they have

a steady income and his/ her salary account is maintained with SBI.
Expected rent accruals (less taxes, cess, etc.) if the house / flat being purchased is

proposed to be rented out.

Depreciation, subject to some conditions.
Regular income from all sources.

Security for SBI Home Loan

Equitable mortgage of the property

Margin / LTV Ratio

Loan Amount Upto Rs. 20 Lacs: 10% (minimum margin) / 90% (Maximum LTV
ratio)
Loan Amount Above Rs. 20 Lacs: 20% (minimum margin) / 80% (Maximum

LTV ratio)
Repayment period for SBI Home Loan: Maximum 25 years (or) Up to the age of 70
years (the age by which the loan should be fully repaid) of the borrower, whichever is
early.
Moratorium period for SBI Home Loan (Repayment holiday): The moratorium period is
included within the maximum repayment period.

SBI Housing Loan Rate of Interest

Floating Rate of Interest:

Interest on the loan will be charged at prevailing floating rate of interest on a daily
reducing balance at monthly rests. The rate of interest is subject to revision from time
to time due to (i) changes in Base Rate or (ii) revision even without change in Base
Rate the Bank has the option to reduce or increase the EMI or extend the repayment
period or both consequent upon revision in interest rate.

Fixed Rate of Interest:

Interest on the loan will be charged at the prevailing fixed rate of interest on daily
reducing balance at monthly rests, subject to interest rate reset at the end of every two
years on the basis of fixed interest rates prevailing then. State Bank of India (SBI)(link
is external) may at its discretion stipulate the periodicity of computation of interest.
Further, SBI may at its sole discretion alter the rate of interest suitably and
prospectively in the event of major volatility in interest rates during the period of the
agreement. Thenceforth the rate of interest varied as aforesaid shall be applicable to
the Loan. SBI shall be the sole judge to determine whether such condition exists or
not. If the Borrower is not agreeable to the revised interest rate so fixed, the Borrower
can request SBI, within 15 days of receipt of the notice intimating change in interest
rates from SBI, to terminate the loan and the Borrower shall repay the Loan and any
other amount due to SBI in full and final settlement in accordance with the provisions
of the Agreement relating to pre-closure.

SBI Housing Loan Calculation of interest

Interest on the amount of the loan will be applied at the prevailing rate per annum on
daily reducing balance with monthly rests.
Please download this Excel file for calculating your Bank loan EMI.

SBI Housing Loan - Intimation of change in Interest Rate

The borrower shall be deemed to have notice of changes in the rate of interest whenever
there are changes in Base Rate or increase in interest rates where there is no change in
Base Rate are either displayed on the Notice Board of the Branch or published in news
papers or made through entries of the interest rate charged in the passbook/statement
of account furnished to the borrower and the borrower is liable to pay such revised rate
of interest.

Penal Interest of SBI Housing Loan

In the event of a default in payment or any irregularity in the account, the Bank reserves
the right to levy a higher rate of interest as it deems fit. Enhanced rate of interest @2%

p.a on the irregular amount for the period of irregularity, over and above the applicable
rate will be charged if the Equated Monthly Instalment (EMI) remains unpaid for a
period of 30 days from the due date, for any reason, including a bounced cheque.

SBI Housing Loan Bounced cheque/ECS or SI dishonours

A penalty of Rs 250/- will be charged for every bounced cheque / ECS or SI dishonors.
The rate may vary from time to time.

SBI Housing Loan Repayment

The loan is to be repaid in Equated Monthly Installments over the tenure of the loan.
The repayment installment commences (a) 2 months after completion of construction of
house/flat or after eighteen months from disbursement of first installment, where loan
is released in installments, whichever is earlier or (b) from the next month after the date
of full disbursement in respect of outright purchase of land/house(link is
external)/flat/extension, repairs or renovation of an existing house/flat. The liability to
the bank will be extinguished only when the outstanding in the loan account becomes
Nil, on payment of residual amount, if any.

SBI Housing Loan Tenor

Maximum 25 years (or) up to the age of 70 years (the age by which the loan should be
fully repaid) of the borrower, whichever is early.

SBI Housing Loan Pre-closure Charges

Loans on Fixed and Floating rate of interest: Pre-closure charge of 2% of the
amount pre-paid in excess of normal EMI dues will be levied in case of pre-closure of
loan within 3 years from the stipulated date of commencement of repayment. If the loan
is pre-closed from own resources other than borrowings, for which proof is submitted to
the satisfaction of the Bank, pre-closure charges shall not be levied irrespective of the
period for which the loan account has run. There is Home Loan FAQ section for more
about pre-closure charges.

Security for SBI Housing Loan

Primary: The loan will be secured by Equitable / Registered mortgage/extension of
mortgage of the land and building/flat for which the loan is to be sanctioned.
Collateral: If mortgage of the property being financed is not possible, Bank may
accept, at it discretion, security of adequate value in the form of Life Insurance policies,
Government Promissory Notes, shares/ debentures, gold ornaments or such other
tangible security as may be deemed appropriate.

Interim Security Pending Mortgage: Wherever creation of mortgage is likely to be

delayed for any valid reason, suitable security including third party guarantee, as
considered necessary, may be taken for the interim period.

Utilisation of the SBI Housing Loan

The amount of the loan shall be utilized strictly for the purpose detailed in the
borrowers application form and in the manner prescribed. The construction of the
house/flat or the modification/extension proposed by the borrower in the existing
house/flat should be strictly according to the plan approved by the Local
Authorities/Town Planning and Development authorities. Any modification desired in
the plan as originally approved, can be undertaken only after express sanction for it has
been obtained from the appropriate authority.

Insurance for SBI Housing Loan

The house/flat shall be insured comprehensively for the market value covering fire,
flood, Earthquake etc. in the joint names of the Bank and the borrower. Cost of the same
shall be borne by the borrower.

Inspection of the SBI Housing Loan Utilization

The Bank will have the right to inspect, at all reasonable times, the borrowers property
by an officer of the Bank or a qualified auditor or a technical expert as decided by the
Bank and the cost thereof shall be borne by the customer.

Fees and charges for SBI Housing Loan

1.

SBI Housing Processing fee: Is to be paid upfront at rates laid down by the
Bank from time to time. Entire processing fee would be refunded if application is
rejected after initial scrutiny. If loan application is rejected after site inspection
and/or obtention of legal/valuation report, 75% of the processing fee will be
reimbursed. No refund of processing fee is permissible in case of sanction/rejection by
sanctioning authority.

SBI Housing Loan Amount and Processing Fee shall be as

follows:
Upto Rs.5 Lac - Rs.1000/Above Rs.5 Lac and upto Rs.10 Lac - Rs.2000/Above Rs.10 Lac and upto Rs.20 Lac Rs.5000/Above Rs.20 Lac and upto Rs.50 Lac Rs.7,000/Above Rs.50 Lac and upto Rs.1 Cr Rs.8,000/-

Above Rs.1 Cr and upto Rs.5 Cr Rs.10,000/Above Rs.5 Cr Rs.20,000/2.

SBI Housing Legal Fee*: Title of the property(link is external) proposed to be

purchased is to be clear, absolute, unencumbered and marketable to the satisfaction
of the Banks Solicitor / Advocate. Fee is to be paid for legal opinion to be obtained
through a lawyer on the Banks panel. This fee is payable regardless of whether the
clear title is established and whether the loan is sanctioned.
3.
SBI Housing Valuation fee*: The valuation of the land and building /flat will
be done by the empaneled valuer of the bank and prescribed fee is payable by the
borrower.
4.
All legal and other expenses, stamp duty, registration charges and other
incidental expenses incurred in connection with the loan shall be borne by the
borrower.
*Items 2 and 3 may vary from place to place and the rates will be intimated to the
applicant by the branch/sourcing entity. Item 4 varies from State to State according to
the local registration laws, Stamp Duty Act etc. and is payable to the State Govt.
State Bank of India retains the right to alter any charges or fees from time to time or
to introduce any new charges or fees, as it may deem appropriate, with due intimation
to customer.
5.

Conversion charges for switching loan from fixed to floating

rate: Option for switching loan from fixed to floating rate or vice-versa is not
available.
Fees and Charges are subject to change from time to time at the sole discretion of SBI.

SBI Housing Loan Disbursement

The loan will be disbursed only on the following conditions:
1.

All the security documents prescribed have been executed by borrower/coapplicant (s)/ guarantor/s
2.
A valid mortgage (equitable or registered if equitable mortgage is not possible)
has been created in favour of the Bank as per the laws of the State.
3.
Wherever creation of mortgage is likely to be delayed for any valid reason,
suitable security including third party guarantee, has been taken for the interim
period.

4.

The loan will be disbursed in stages where a loan for construction is desired or
purchase is through payment to seller in installments.
5.
All necessary statutory compliance are in place.
SBI may disburse the quantum of loan in lump sum or in installments at its own
discretion depending on the level of construction of the House/Flat as acceptable to
SBI.
SBI will disburse loan amount directly to the builder/seller/society as the case may be
and as requested / specified/ directed by the customer to SBI at the time of each
disbursement. SBI shall not be responsible / liable in any manner whatsoever for any
delay by the customer in providing such request/ specification/ direction to SBI and
the customer shall not claim any costs, charges and expenses in any relation to any
non-disbursal by SBI due to any such delay by the customer.
The Bank reserves the right to collect any tax if levied by the State/Central
Government and/or other Authorities in respect of this transaction.

Default of SBI Housing Loan

In the event of default i.e. if the amount due is not paid by due date, the customer will be
sent reminders from time to time for payment of any outstanding on his loan account,
by post, fax, telephone, email, SMS messaging and/or through third parties appointed
for collection purpose to remind, follow-up and collect dues. Any third party so
appointed, shall adhere to the Indian Banks Associations (IBA)(link is external) code of
conduct on debt collection.

SBI Housing Loan - Documents To Be Submitted

To avail Housing Loan from State Bank Of India (SBI), one has to submit the personal
related documents and property related documents:

Personal Related Documents

List of papers/ documents applicable to all applicants:
1.
2.
3.

Completed SBI Home Loan application

3 Passport size photographs
Proof of identify (photo copies of Voters ID card/ Passport / Driving license/ IT
PAN card / Aadhaar)
4.
Proof of residence (photo copies of recent Telephone Bills/ Electricity
Bill/Property tax receipt/ Passport/ Voters ID card)
5.
Proof of business address for non-salaried individuals

6.
7.
8.

Statement of Bank Account/ Pass Book for last six months

Signature identification from present bankers
Personal Assets and Liabilities statement

For guarantor (wherever applicable):

1.
2.
3.
4.
5.
6.

Personal Assets and Liabilities Statement

2 passport size photographs
Proof of identification as above
Proof of residence as above
Proof of business address as above
Signature identification from his/her present bankers

Additional documents required for salaried persons:

1.
2.

Original Salary Certificate(link is external) from employer

TDS certificate on Form 16 or copy of IT Returns for last 2 financial years, duly
acknowledged by IT Deptt.
(*Relaxation may be permitted by AGM (Region) / AGM (RACPC) / AGM (Branch) in
the case of salaried persons, provided sanctioning authority is satisfied about the
genuineness of source, amount and continuity of income confirming repayment capacity
of the borrower over the loan tenor. In all such cases basis for income verification
should be properly recorded in the loan appraisal.)

Where check-off is proposed:

1.
2.
3.

Revocable letter of authority vide Annexure / HL-C

Letter from employers vide Annexure / HL-D
Irrevocable Letter of Authority where applicant himself is Drawing and
Disbursing Officers vide Annexure / HLE

Additional documents required for Professionals/selfemployed/ other IT assesses:

1.
Acknowledged copies of 3 years I.T. returns/ Assessment Orders.
2.
Photocopies of challans evidencing payment of Advance Income Tax.
(* photocopies to be kept for our records after verification of the originals with suitable
noting regarding verification of the original by the official concerned)

DOCUMENTS TO BE SUBMITTED FOR SBI HOME

LOAN (Property Related Documents)

Additional documents required when old property is being

purchased:
1.
2.

Valuation certificate from a Government approved valuer.

Certificate from the Govt. approved architect/ structural engineer certifying the
condition of the house/ flat.
3.
The condition of the house / flat should be such that the security cover for the
Bank's loan remains unaffected till full repayment of the loan.

Property documents:
1.
2.

Sale Deed, Agreement of Sale, Original share certificate(s) issued by the society.
Copy of approved plan (wherever applicable) of proposed construction /
purchase / extension
3.
Permission for construction (wherever applicable)
4.
Estimate / Valuation Report from approved valuers (Chartered Engineer /
Architect) in respect of the property to be financed (wherever applicable)
5.
Land and Building tax paid receipts, possession certificate, location sketch of
property certified by revenue authorities
6.
Letter of allotment from Housing Board/Society/Private Builder
7.
Original receipts of advance payments towards purchase of flat
8.
Search report / Non encumbrance certificate for the last 13 years from Bank's
advocate.
9.
Original of land tax paid receipt and possession certificate issued by the revenue
authorities.
10.
Original NOC under ULCR Act 1976
11.
Copy of the relative order in case of conversion of agricultural land
12.
Original No objection certificate [NOC] from Housing Society/Builder
13.
Detailed estimate of cost of construction of house
14.
Letter from the builder / society / Housing Board intimating their a/c number
and name of their bankers, for remittance of installments.

Other documents:
1.
2.

Lawyer's report as per the standard format approved by the LHO concerned.
Valuation report from empaneled valuer as per the standard format approved by
the LHO concerned.
3.
Declaration by the borrower (as per Annexure-A, under SBI Realty) agreeing to
construct the house within the stipulated period in case of loan granted for purchase
of plot of land.

Download Bank Loan EMI Calculator

Please download this Excel file for calculating your Bank loan EMI.
EMI is based on mainly 4 factors:
1.
Loan Amount
2.
Loan Term
3.
Interest Rate
4.
Number of Installments in an Year
You can change input values given above to find your EMI accordingly.

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SBI Home Loan Documents

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News Update
SBI Home Loan - Interest Rate Reduced
Date: 08-04-2016
State Bank of India reduced its interest rate for Home Loan Products following outcome
of 0.25% rate cut by RBI. The effective interest rate for home loan will be 9.4% for
woman customers and 9.45% for others under the Marginal Cost of Funds Based
Lending Rate (MCLR) which aims to provide fair interest rate to customers.

SBI Marginal Cost Of Funds Based Lending Rate

(MCLR) With Effect From-01.04.2016
Tenor: Overnight
MCLR Interest: 8.95%
Tenor: One Month
MCLR Interest: 9.05%

Tenor: Three Months

MCLR Interest: 9.10%
Tenor: Six Month
MCLR Interest: 9.15%
Tenor: One Year
MCLR Interest: 9.20%
Tenor: Two Years
MCLR Interest: 9.30%
Tenor: Three Years
MCLR Interest: 9.35%

7 must do things on Home Loan Prepayment

and Closure procedure
July 20, 2014 by parsha 73 Comments
Closing a home loan and owning a debt free home is a dream come true. It
is time to enjoy the rental income without any worry. But a home loan
closure must be completed properly to ensure no further problems arise in
future.

Jeeva is my neighbor in Chennai who had bought a house 10 years ago. He

had pre-closed his loan 2 years ago.When he was about to sell his house last
month, he was in for a rude shock.

The bank had returned the original documents 2years ago but had failed to
remove the lien on mortgage entered on the house nor provide the No Object
Certificate.
This prevented him from having an immediate sale and he had to get the
pending documents. It is the responsibility of the bank to provide these
documents once the home loan is closed.
In India, sometimes you dont get unless you ask for them. So be sure to ask
what you need. Let us now dive into what things you must do once you pay
all your home loan installments and close your home loan.
Popular post: Complete guide on PPF

Home Loan Pre-payment

Home loan pre-closure is nothing but making your home loan debt payments
to the bank in part or full before the tenure. A home loan is usually for 15 to
20 years and is one of best investment options . If youre planning to
close this before the scheduled tenure then you must let the bank or
financial institution in writing.
Banks and housing finance companies usually charge a prepayment

penalty if loan is

closed ahead of tenure.

Some banks do not levy this if you establish the source of funds used for prepayment. This will involve furnishing your salary slips or ITR filing with bank
statement.

Update: As per the new mandate of Reserve Bank of India, banks are not
allowed to collect prepayment penalty anymore on floating rate loans.2
This is a huge leap forward for consumer welfare and home loan borrowers.
So you dont need to pay anymore penalty. If your bank still levy a prepayment penalty you can forward a complaint to Consumer Forum of India
and Banking Ombudsman.1
RBI Notification: Abolition of penalty by RBI

7 must do things on home loan closure

We have provided 7 points which you need to follow to complete the home
loan closure. Points 1,2,3,7 are the most important. Dont neglect or miss
them at any cost.
1) Get back all the original documents
Once you have made all your payments, the Bank or Housing Finance
Company will likely give you the original documents. You should make sure
that all the documents you submitted with the bank when taking the loan are
returned. Usually it will be the Title Deeds and Mother Deed (if applicable).
Dont just check for document alone. Make s1ure that all the pages are
present in good condition as well. I have seen instances where last page of
sale deed went missing. In that case you need to arrange for the missing
page which is a tedious process.
Make sure all the pages are intact in front of the bank official before signing
on the acknowledgement of the bank.
Once you sign, you cant undo it and banks usually wont be responsive in
this regard. It is usually a good procedure to obtain the documents from bank
by visiting them than request documents by courier.

Tip: Once you get the originals scan them and keep a soft copy in a safe
place.
Also read: Documents to check to avoid fraud when buying house

2) Obtain No Object Certificate

NOC or NC is a No Object certificate which is a clearance certificate from the
bank or housing finance company. This states that the Bank does not have
any more interest in the property and its cleared by the bank after removing
all hypothecation.
When you get this make sure the NOC clearly mentions the Property details
(like address etc.,) , name of the borrower, home loan account number, date
of loan starting and closure, amount borrowed and repaid(some banks dont
mention) .
Also a clause should be clearly mentioned that the borrower has paid all the
dues and the property is now debt-free. This will make sure that the property
is entirely yours now.

3) Remove lien on property from Registrar Office

In some cases where the credibility of the borrower is questionable, some
banks might have created a lien. A lien is nothing but a transaction
registered in the Registrar office which prevents you from selling the
property.

Source: indiatimes.com
If no lien was created, then there is no issue. However, if a lien was created
then it is important to have this lien removed.
A bank official will accompany you to the Registrar office to terminate this
lien. Remember that you will not be able to sell the property unless this is
removed.
A home loan closure is incomplete without this process. This is what
delayed things for my friend Jeeva mentioned in the beginning. It will take 7
to 10 days for changes to reflect in the Registrar accounts.

4) CIBIL Credit Update

Lenders do not show the same interest in updating CIBIL when loan is repaid
as when loan is taken. Banks/finance institutions often delay or forget to
inform CIBIL when a home loan is pre-closed.
A CIBIL score is nothing but proof of your credit worthiness. It takes 20-30
days to complete the process. Be in touch with your bank to make sure this
is done (Its likely you wont get proper response J . A good relation with
banker comes in handy). Once the bank informs its done, get an updated
CIBIL report to make sure it is reflected in score.
Check out below two articles related to this process
How to get Credit score and how it affects you
Top 10 tips to improve credit score

5) Get legal clearance certificate from lawyer

A legal clearance certificate from a reputed lawyer is an optional attachment.
Some people dont prefer to get this. But we suggest you get this as this will

speed up your process if you plan to sell the house. It also helps to get a
legal opinion to make sure the home loan closure procedure is indeed
complete.

6) Have a detailed track of loan repayments

It is advisable to keep a track of your bank statement which reflects your
Loan EMI. If you made any lump sum prepayments keep a photocopy of the
cheque/demand drafts. A handy tip is to maintain a file for all home related
documents than put them in a cover.
Economic times article: Home loan closure

7) Obtain a new Encumbrance certificate from Registrar

This is a must do step. Once the bank has provided the NC and removed any
existing lien, apply for an EC in the Registrar Office. An EC is nothing but a
document with all financial transactions performed on the property.
Once the mortgage/loan is cancelled, it should be reflected in the EC. An EC
is a very important document. So if the latest EC does not reflect closure of
loan, approach the bank or Registrar for further procedure. Dont neglect this
step. This will complete the home loan prepayment procedure1
Check you EMI : Home loan EMI calculator
It is not enough to just pay back your home loan. Make sure that you
complete all the necessary procedure of home loan closure to avoid future
problems. Close your home loanand enjoy your stay in the house
peacefully. Cheers!
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