Home Loan Project Final (Arun)

ANALYZING THE HOME LOAN MARKET AND DIFFERENT PLAYERS IN THE MARKET VIS-A-VIS THEIR MARKET SHARE.
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An Introduction to Home loans
1. What is a Home loan?

Home loan is the sum of money a bank or financial institution lends you to help you buy your dream home. By taking a home loan from a bank or a housing finance company you pledge your home as the lenders security for repayment of your loan. The bank or financial institution will hold the title or deed to the property till the loan has been paid back with the interest due for it. Home loans are generally taken for long tenures as the loan amount is usually a huge sum. A home loan can be taken anywhere between 5 and 30 years. The amount of loan one is eligible for is dependent on the individuals credit profile.
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2. What is a down payment? What are the ways in which one can source his / her down payment?
Generally as a thumb rule, banks or financial institutions lend 85% of the cost of the property. 15% of the money is expected to be paid as a down payment for the loan. Opting for a personal loan if you can afford that cost as well, pledging your investments, getting loan against your insurance policy etc. are some ways to liquidate your assets and pay your down payment.
3. Are there any specific loans available for NRIs?
Yes, there are specific loans that are tailored for the requirements of NRIs who wish to build or buy a home in India.
4. What is reverse mortgage?
This loan facility allows a senior citizen (above 60 years of age) eligible to apply for a reverse mortgage loan and avail 60% of the value of the residential property he resides in and retain the right to continue to reside there. The maximum tenure for this loan scheme is 15 years.
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Loan Eligibility & Cost

1. Who is eligible for a home loan?
Indians with a regular source of income, which includes salaried individuals, self-employed professionals, self-employed business people, NRI individuals and existing property owners who can pledge it as security for the loan, are all eligible for a home loan. The individual applying for the loan should be above 21 years of age, when the loan period begins and should be less than 65 years when the loan period closes.
2. What are the other factors, which are relevant for home loan eligibility?
- Purpose of the loan - (purchase of property, improvement, purchase of land) - Age - Income (savings history) - Experience & Qualification (stability and continuity of occupation) - Employer - Existing loans
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- Number of dependents - Credit History (Past repayment history) - Resident status (The maximum loan that can be sanctioned to a resident Indian is Rs.5, 000,000)
3. What are the factors included in the total loan cost?
Registration charges, transfer charges and stamp duty costs apart from the actual loan amount are included in the total cost calculation of the home loan.
4. How much loan can one avail?
The amount of loan you can avail depends on factors like salary details, qualifications, employer/business, years of experience, growth prospects, alternate employment prospects and sources of other income, if any. Generally, about 40% of your monthly gross income can be availed as your loan amount. For self-employed applicants, profit is the benchmark that determines loan value. The longer the time frame for repaying the loan the lower the EMI and this also means you can opt for a larger loan amount. The loan amount you are eligible for is also dependent on other factors like the company you are employed with, the location of your residence and your credit history.
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To know how much money you are eligible for, to compare banks and figure who offers you the best loan bargain.
5. What are the other costs that usually accompany a home loan?
Home loans are usually accompanied by the following extra costs: a) Processing Charge: It is a fee paid to the lender when you apply for a loan. It could either be a fixed amount not linked to the loan or could also be a percentage of the loan amount. b) Pre-payment Penalty: When a loan is paid back before the end of the agreed duration, a penalty is charged by some banks/financial institutions, which could be up to 5% of the amount pre-paid. c) Commitment Fees: Some institutions levy a commitment fee in case the loan is not availed within a stipulated period of time after it is processed and sanctioned. d) Miscellaneous Costs: Some lenders may levy a documentation or consultant charge. e) Registration charges of the mortgage deed.
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6. What are the details of some of the incentives offered by housing finance institutions?
Some lending institutions sanction the loan without requiring you to identify a property as a prerequisite for eligibility a) Free accident insurance b) Discounts c) Waiving of pre-payment penalty d) Waiving of processing fee e) Free Property Insurance
7. When can one take a home loan?
You can take a home loan before or after identifying the property you want to purchase or when the property is under construction or for purchasing a plot of land for investment or to renovate an existing home.
8. Can one have a co-applicant for a home loan?
Yes, it is good to have a co-applicant. This can help you increase the loan amount you are eligible for as the income of the co-applicant is also taken into consideration. Providing additional security like bonds, fixed deposits and LIC policies will also help in enhancing eligibility.
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9. Who is eligible to be a co-applicant?
The co-owner of the property you are going to purchase should also be a coborrower/co-applicant. The reverse however is not stressed by lending institutions. Financial institutions accept a parent or spouse as an ideal choice for a co-applicant. A fiance can also become a co-applicant but the loan disbursal will begin only after the submission of the marriage certificate.
10. What is EMI? How is it calculated?
An equated monthly Installment (EMI) is the amount of money that is paid back to the lender on a monthly basis. It is essentially made up of two parts, the principal amount and the interest on the principal amount equally divided across each month in the loan tenure. The EMI is always paid up to the bank or lender on a fixed date each month until the total amount due is paid up during the tenure. The EMI facility helps the borrower plan his budget. The EMI is calculated taking into account the loan amount, the time frame for repaying the loan and the interest rate on the borrowed sum.
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11. What is the difference between a fixed interest rate and floating interest rate?
A fixed interest rate remains constant throughout the loan tenure regardless of the market conditions whereas a floating interest rate can decrease or increase depending on market fluctuations. For instance, it increases when RBI hikes up short term interest rates. Banks usually quote the floating rate loans as their index rate (prime lending rate) plus or minus x%. Banks usually increase or decrease their prime lending rate when the RBI increases or decreases short term interest rates.
12. What are the different types of interest rates available?

Interest rates are quoted either as fixed flat rates or reducing balance rates. In the flat rate method of interest calculation, the outstanding loan amount is never reduced during the entire tenure of the loan even though you make payments monthly. In the case of reducing balance interest rates the EMI is calculated on the basis of daily, monthly, quarterly or annual rests. A rest indicates the time frame in which the bank will recalculate the EMI based on the amount of loan paid back and the frequency of any compounding interest rate. Suppose you have a loan with an annual rest then, though you pay a monthly installment, your benefit kicks in only at year end, here the bank gets to benefit. A monthly rest will recognize the reduction in the loan amount on a monthly basis, a quarterly rest Page 8 of 64
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does it every quarter while a daily rest will do it each day. The more closely the rest matches the frequency of your payments, the lower the total interest paid as the total outstanding loan amount is reduced by your monthly payments more frequently.
13. What is an amortization schedule?
An amortization schedule is a table giving the reduction of your loan amount by monthly installments. The amortization schedule gives the breakup of every EMI towards repayment interest and outstanding principal of your loan.
14. What are the factors one need to keep in mind while comparing loans from different financial institutions?
A loan applicant needs to keep a few things in mind when comparing loans. The applicant needs to determine the kind of loan and the amount he wants to apply for. He needs to keep in mind the total cost of the loan, which will be paid up by the end of his loan tenure. The second step is to understand the terms and conditions under which financial institutions are offering the loan. Finally he needs to evaluate, which loan offer is the best bet for him. Search for your home loan at BankBazaar.com to gain access to the most interactive tools in helping you compare and evaluate the best deal you can get from any bank of your choice.
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Other factors that you should look out for are customer service levels and the average time the bank takes to process a loan.
15. Can one avail a tax rebate on my home loan?

Section 80C and Section 24 grant income tax rebates to people who have taken home loans. These tax deductions are capped at 1 lakh for the principal repaid and 1.5 lakhs for the interest repaid.
16. What are the loan tenure options?
You have the option of selecting a loan tenure you are comfortable with, ranging up to 25 years, provided the term does not extend beyond your reaching 65 years of age or retirement age, whichever is earlier.
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Credit History
1. What is credit history? How does a financial institution check on my credit history?
A credit history is basically a record of your past repayments of loans and credit card bills. Also, there is a central bank of data available with the Credit Bureau of India Limited (CIBIL), where data from all the banks on existing loans and their repayment patterns of their customers are accumulated. Before approving your loan a financial institution always checks with CIBIL on your loan repayment track record.
2. Is the repayment track record of my previous loans considered in calculating my eligibility for a new loan?
It definitely has its benefits! A good repayment track record could fetch you a higher loan amount at a lower interest rate as it is standing proof for your money management capabilities. In case of a bad repayment record you will be charged high interest rates and you will find it difficult to obtain a loan.
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3. If a loan application is rejected, does that reflect on my record?
Every time you apply for a loan to a financial institution, your credit report with CIBIL is checked and the inquiry appears on the record. Many such inquiries will adversely affect the interest rates you are charged and will make your borrowing options limited as it suggests you are likely to be facing a financial crunch.
Documentation
1. How can one apply for a loan?
When you are ready to apply for a home loan, you should evaluate your options by presenting your requirements with different banks. What was earlier a daunting task involving rushing from bank to bank for a series of discussions and bargaining for the best deal, is now just a simple 15 minute process thanks to BankBazaar.com. Search BankBazaar.com to find the best loan bargain that is most suited to your needs. Then get your documents ready for the Bank to collect it at your doorstep and begin processing your loan.
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2. A document checklist, so that one can be ready when the Bank comes to collect it from my residence.
Make sure you check with your Bank or NBFC to figure out which of the following documents you need to submit, as the requirements differ from bank to bank. Here is a standard list of options for each document required.
A. Identity proof:
o Driving license o Voters ID o Passport o PAN card o Ration card o Employee ID o Bank passbook o Letter from a recognized public authority or public servant verifying your photograph o Confirmation letter from your employer or another bank verifying your photograph
B. Address Proof:
o Driving license o Voters ID o Passport Page 13 of 64
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o Ration card o Bank passbook or Bank account statement o LIC policy/ receipt o Utility Bill - telephone, electricity, water, gas (less than 2 months old) o Letter from any recognized public authority verifying residence address of the customer o Letter from your employer
C. Age Proof:
o Driving license o Passport o Bank passbook o PAN Card o Birth certificate o 10th standard mark sheet
D. Income Proof:
The following set of documents that detail your credit profile varies according to whether you are a salaried individual or a self-employed individual.
i. Self Employed/Entrepreneurs:
o A brief introduction of Business/Profession o Balance Sheet, profit and loss account statement of income, proof of income tax returns o for the last 3 years certified by a CA o Photographs o Receipts of advance tax payments if any made Page 14 of 64
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o A photocopy of Registration Certificate of establishment under Shops and Establishments Act/Factories Act o Registration Certificate for deduction of Profession Tax o Certificate of Practice o Receipts of Bank loans o Proof of investments (FD Certificates, Shares, any other fixed asset)
ii. Salaried Individuals:

1. Income Proof (you just need to provide one of the options listed for income proof):
o Latest Pay slip o Form 16 o Increment/Promotion letters o Appointment letter o Pay slip (Last 2 months) with salary account bank statement o Certified letter from Employer o IT returns (for three years) 2. Investment proof (FD certificates, shares, any fixed asset etc.) 3. Documents supporting the financial background of the borrower (his liability and assets if Any) 4. Photographs.
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Property Documents
A. If a flat is purchased from the builder, one needs the following supporting documents to submit to the bank.
1. Original copy of your agreement with the builder 2. 7/12 extract - This is issued by the concerned land authorities giving details such as the survey numbers, area, date from which current owner is registered as owner etc. 3. Property register card, which is obtained from the City Survey Department 4. N.A. permission for the land from the collector, if its agricultural - If the land is agricultural and is being utilized for residential/ commercial/industrial use, then such agricultural land has to be converted to non-agricultural land and a Non-Agriculture Order has to be obtained from the Collector of the district where the property is located. 5. Search Report and Title Certificate - A search report and title certificate can be obtained from an advocate who will conduct a survey of the title of the property by visiting the office of registrar. A legal opinion can avoid any legal hassles later and is mandatory to be filed with the agreement for sale. 6. Development agreement between the owner of land and the builder 7. Copy of order under the Urban land Ceiling Act
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8. Copy of building plans sanctioned by the competent authority 9. Commencement certificate granted by the Corporation 10. Building completion certificate 11. Latest receipts for taxes paid towards the land or property or flat to be purchased 12. Partnership deed or memorandum of association of the builders firm
B. In case one is buying from a Cooperative Society, then ensure he /she has the following documents in place.
1. Original share certificate of the Society 2. Allotment letter from the Society in your name 3. Copy of the lease deed, if executed 4. Certificate of the registration of the society 5. Copy of the byelaws of the Society 6. No objection certificate from the Society 7. 7/12 extract or property register card in the Societys name 8. Copy of N.A permission for the land from the collector 9. Search Report and Title Certificate Page 17 of 64
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10. Copy of order under the Urban Land Ceiling Act 11. Copy of the building plans sanctioned by a competent authority 12. Commencement certificate granted by Corporation 13. The latest receipts of taxes paid for the property 14. Original Agreement to assign / Deed of assignment
C. If one is constructing on your own land then one will need the following documents.
1. Original sale deed of land and extract of Index II 2. 7/12 extract or property register card in your name 3. Copy of N.A. permission for land from the collector 4. Search and title report 5. Copy of tax paid under Urban Land Ceiling Act (obtained from Commissioner ate of Urban Land Ceiling and Urban Land Tax) 6. Copy of the building plans sanctioned by a competent authority 7. Building permission granted by the Corporation 8. The latest receipts of taxes paid for your land 9. Estimate of the cost of construction certified by the architect
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3. What are the documents that need to submitted for disbursement of a home improvement loan?
Title deeds for the past of 13 years Encumbrance certificate for the past 13 years Khata certificate Most recent tax receipts for the property Approved plan License for the extension Cost estimate from a qualified engineer Cost estimate from the architect
4. What are the things one needs to keep in mind before one selects a property?
You need to check if the property is approved by the government and if it is registered. You need to evaluate if the location of the property is conducive to your familys needs. Schools, hospitals, shops, transportation facilities, the reputation of the builder, availability and consistency in the supply of power and water, security, parking facilities, location in a residential area etc. need to checked out.
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5. Is it a must to apply for insurance cover for ones property?
Though it is not a must, considering the huge sum of money spent on purchasing the property it is a sound practice to have it insured to protect yourself against any danger that might befall on the property. Usually property insurance comes as an incentive with your home loans after a certain period. Insurance rates are usually very affordable.
6. What is a No Objection Certificate?
This certificate states that it allows the property to be mortgaged by the bank. This comes into effect in instances like a co-operative society that owns the property but whose members have a right to reside in the premises and also transfer the rights to someone else. This is also true in the case of leased land on which property is built. In this instance, the property is owned by the borrower but the land on which the property is built legally belongs to a development authority. This certificate safeguards the interests of the Bank.
7. When does a property become `pre-approved?
When a bank has already verified the title documents of the property of a particular builder, it files them in the bank records and labels them preapproved. This means that when a buyer approaches the bank for purchasing a
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house or apartment in that property, the bank need not do a title verification process all over again.
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Processing the loan

1. What are the steps involved in taking a loan?
There are three steps to a home loan application 1. Application - You submit a completed application form with all the essential documents. 2. Sanction - You get an approval for a specific loan amount based on the value of your property and repayment capabilities. 3. Disbursement - The loan amount is transferred to the applicant.
2. How long will it take for the financial institution to contact me after one submits my application?
Most financial institutions will contact you within one business day of your application being submitted.
3. How long will it take for the financial institution to approve the loan?
Loan approvals are at the sole discretion of the financial institution. The time taken to approve a home loan is usually about a week, subject to the fact that all the required documentation has been submitted to the bank.
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4. How soon will one get my loan amount?
Once all necessary documents are submitted and the paperwork completed, including submission of the post dated cheques (PDC) or signed ECS (Electronic Clearing System) form, the financial institution will usually disburse your loan within seven working days of the loan approval.
5. Does the financial institution verify authenticity of the submitted documents and the details provided in my application?
Yes, the financial institution will verify all submitted documents and the details provided in your loan application. Your application could be declined in case of any discrepancies.
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Different Player in the Home Loan Market.

Banks Providing Home Loans ABN AMRO Andhra Bank Axis Bank Bank of Baroda BHW Birla Home Finance Canara Bank Citibank Corporation Bank Dewan Housing Finance GE Money GE Wizard HDFC HSBC ICICI IDBI
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India bulls Indian Bank LIC LIC Housing PNB SBI Standard Chartered
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ICICI Bank is the largest provider of Home Loans in India. ICICI Home Loans offer unbeatable benefits to ensure that its clients get the best deal without any hassles. ICICI Bank Home Loans provide loans not only at competitive interest rates, but also are so designed that they cater to the specific needs of consumers.
New products / new features in existing products are introduced from time to time based on customer feedback. ICICI Bank offers easy home loans for purchase or construction of flat or house.
The benefits associated with ICICI Home Loans which give them an edge over other players in the market are:

Attractive and customer friendly loan interest rates Loans as low as INR 0.2 million is available Term loans up to 20 years is available Loans come with a Free Personal Accident Insurance Policy Premium charged in case of insurance options for Home Loans is also attractive.
Simplified Documentation Doorstep Service Home Loans can be sanctioned even before selecting a property
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(All the above facilities are situational and subject to changes according to the company's discretion.)
With varied offering of house loans and home finance, ICICI Bank Home Loans provide a variety of options to its customers from which they can choose the one that suits them the best.
The Various policies or terms of ICICI Home Loans are:

Fixed Rate Home Loan Adjustable Rate Home Loan or Floating Rate Home Loan Partly Fixed and Partly Floating Rate Home Loan Smart fix Home Loan Money saver Home Loan
The other types of loans include Land Loans, Office Premises Loans, Home Improvement Loan and Home Loan for NRI. One can also leverage his/her existing property to get a Loan against Property, Property Overdraft or Lease Rental Discounting. All of these are available at a fixed rate or an adjustable rate of interest.
Another significant feature of ICICI Home Loans is that it allows the customer transfer the balance of his/her existing home loan from other banks. Moreover, the Home Loans are also liable to tax benefits.
Thus, for all good reasons mentioned above, ICICI Home Loans have been and will be the most sought after in the distant future.
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ICICI Bank ensures you get the best deal on Home Loans in terms of interest rates and other facilities. You can opt for a floating, fixed or a part fixed and part floating rate Home Loan.
Charges
Home Loans
Loan Processing Charges / 0.5% of loan amount as Administrative Fee or Renewal Charges Rs. 2,000, whichever is higher
Pre-payment Charges (Part) Nil Pre-payment Charges (Full) 2% of Principal Outstanding including amount prepaid in the last 12 months
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Home Loan Counseling - Sharing of over 30 years of home loan experience

We have been a part of a 30 year journey with our 33 Lakh customers. Our home loan counsellors offer you the time tested advice. Be it legal documentation, project or builder approvals, and technical advice, we look forward to sharing with you and this service is absolutely free.
Our project approval facility provides our customers the comfort of purchasing properties from builders who have complied with all basic documentation.
Door Step Service

We offer door step service. Please call HDFC Home Line call for our Sales Executive to assist you or get in touch with the HDFC Office near you, please click here.
We help you find your dream home

You can buy, sell, lease residential or commercial properties through HDFC
Realty.
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Wide Product Range

We provide loans to meet all your requirements for you to make that house a home. Home Loans, Home Improvement Loans, Home Extension Loans, Loans to professionals for office or clinic, Home Equity Loans (Loan against Property), Loan against Rent receivables, Short Term Bridging Loan. Loans on Adjustable Rate, Fixed Rate.
Multiple Repayment Option

Step Up Repayment Facility
Helps young executives take a much bigger loan today based on an increase in their future income, this helps executives buy a bigger home today!
Flexible Loan installments Plan

Often customers, parents and their children, wish to purchase properties together. The parent is nearing retirement and their children have just started working. This option helps such customers combine the incomes and take a long term home loan where in the installment reduces upon retirement of the earning parent.
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Tranche Based EMI

Customers purchasing an under construction property need to pay interest (on the loan amount drawn based on level of construction) till the property is ready. To help customer save this interest, we have introduced a special facility of tranche Based EMI. Customers can fix the installments they wish to pay till the property is ready. The minimum amount payable is the interest on the loan amount drawn. Anything over and above the interest paid by the customer goes towards Principal repayment. The customer benefits by starting EMI and hence repays the loan faster.
Accelerated Repayment Scheme

Accelerated Repayment Scheme offers you a great opportunity to repay the loan faster by increasing the EMI. Whenever you get an increment, increase in your disposable income or have lump sum funds for loan prepayment, you can benefit by: Increase in EMI means faster loan repayment Saving of interest because of faster loan repayment You can invest lump sum funds rather than use it for loan prepayment. The return from the investments also gives you the comfort of paying the increased EMI.
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Wide network of financing

With over 200 offices, 90 outreach programs - HDFC is able to provide home loans in over 2400 locations in India. You can apply at your local HDFC office for properties in locations where we finance.
Post Disbursement Services

Income tax Certificate to enable you to claim the tax benefits are sent to you. This service is absolutely free.
Loan Repayment
ECS facilities Post dated cheques - No charges for replacement of cheques Loan repayment at any HDFC Bank
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Home Loan
Quick and easy home loans
Need help buying a home? Axis Bank's Power Home puts an end to your Real Estate troubles. Augment your reach and buy the house that you've set your heart on.
Features of PowerPlus scheme

Fixed interest of 8% p.a. for 12 months & floating thereafter Balance Transfer facility Doorstep service Nil Prepayment charges AXIS Bank Home Loan has recently seen slashing down in interest rates on its floating rate housing loans by 25 basis points with effect from November 25, 2007. UTI Bank is now working under the name of Axis Bank. UTI bank offers a home loan for:
o o o o o o
Purchasing a plot and constructing a house on it Constructing a house on an already owned plot Purchasing a house/flat but that shouldn't be more than 15 years old For renovating/extending an old house/flat Take-over of existing housing loan Home Loan to NRI on the purchase of ready residential property
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Axis Bank Home Loan Details

Loan can be taken against a property but that property should be within a radius of 50 km from any UTI Bank branch. At the time of taking a loan the age of the applicant should not be less than 24 years and at the end of the tenure he should be less than 65 years. Applicant availing a Home Loan can be Salaried Individual, Professional or Self-employed individual. Salary requirement:
o
A salaried person working in a government or private firm and already has an account with UTI/Axis can take loan if his salary is Rs. 7500 per month.
In case an applicant is not a holder of an account with UTI bank needs to have salary Rs. 8000 per month.
If the spouse is also working then the clubbing facility is provided by AXIS/UTI Bank in which the salary of both is taken together to give home loan and that salary should be Rs. 12,000 per month.
The professionals like doctors, engineers, CAs, management Consultants etc., should have minimum net annual income of Rs. 1.50 lakhs. If clubbed with spouse's income it should be more than Rs.12, 000 per month.
For self-employed person the home loan is granted by UTI Bank if net annual income is Rs. 1.50 lakhs
Axis Bank Home Loan Documents

The minimum amount that you can take as home loan is Rs. 1 Lakh and the Page 34 of 64
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maximum can be Rs. 50 lakhs depending on the need. The interest rate will vary with the tenure of the Home Loans. Documents required taking home loan from UTI/Axis Bank:
o
Identity proof photograph)
(Indian Passport/voter card/driving license and
Salaried employee need to give income proof (the latest salary slip with all deductions/form 16 with recent salary certificate)
For self-employed income tax return of the last 2 years and income computation certificate by a CA.
Residence Proof (Ration card, latest electricity bill, telephone bill, credit card bill)
Guarantor form
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When can one apply for a Home Loan from an ABN AMRO?
You can get a home loan sanctioned from ABN AMRO if you have just decided to acquire a Home in the near future, i.e. even before selecting a home.
What is the current FLOATING RATE OF INTEREST?

Following are the present floating reference rates: ABN AMRO has revised the reference rates downwards by 25 bps effective 1st july-09. The Revised benchmark rates are: Mortgages Floating Reference Rate (MFRR)* = 11.00% Home Prime Lending Rate (HPLR)** = 12.00%
ABN AMRO's Mortgages Floating Reference Rate (MFRR). The reset dates are - 1st January, 1st April, 1st July and 1st Oct of each Calendar Year. ABN AMRO's Home Prime Lending Rate (HPLR). The reset dates are - 1st January and 1st July of each Calendar Year.
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What are the tax benefits which one can enjoy by home loan?
Tax benefits are available on the principal and interest components of a housing loan as per the Income Tax Act, 1961. As the benefits could vary each year, please check out the current benefits available.
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ELIGIBILITY CRITERIA
General

Age 21 to 65 years. Repayment maximum 20 years. 75% of cost of construction OR 85% of estimated cost for outright purchase as loan No guarantee / co obligation. Income tax benefit for payment of both Principle and Interest as per I.T.Rules
Salaried Persons

Maximum 48 times monthly gross income Latest salary certificate Certificate from the employer regarding leftover service Estimates and other related approved documents 30% take home pay.
Housing Loans for Agriculturists, Business & Selfemployed persons

For Agriculturists, four times of gross annual income as per certificate issued by the competent Revenue Authority, supported by evidence of land holdings
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4 times the gross annual income Income Tax Returns Auditor Certificate Estimates and other related approved documents
Rate of Interest for Loans Sanctioned w.e.f., 25.07.2009
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Home Loan is available for:
Purchase of new / old dwelling unit. Construction of house. Purchase of plot of land for construction of a house. Repaying a loan already taken from other Housing Finance Company / Bank.
Repayment period up to 25 years (floating rate option).
Bank offers following benefits with home loan availed by you:
Free Property and Personal Accident Insurance (available for stipulated tenure of loan).
Free Credit Card - "Paras" card (Complimentary for first year) to all new home loan borrowers with loan limit of Rs. 2/- Lakhs and above
Advance up to 90% of the principal amount of home loan repaid for any requirement ('AAA').
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As per current IT provisions - Interest on loan up to Rs. 1.5 Lakhs per annum is exempt from income tax (Under section 23/24(I) of the Income Tax Act).
Terms & Conditions
Income Criteria:
Modified Criteria 36 times of monthly income More than Rs.20,000/- & up to Rs. 48 times of monthly 1 lac income More than Rs. 1 lac 54 times of monthly income Monthly Income Up to Rs. 20,000/-
Margin:
Monthly income Upto Rs.20000/House/flat already constructed from 25% own resources All other cases Above Rs.20,000/House/flat already constructed from 20% own resources All other cases 15% Purchase of plot 20% 20% Purchase of plot 20% Purpose Margin
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Special Home Loan Package: On home loans sanctioned on or after

16.12.2008 - and up to 31.12.2009 (shall not apply to swapping of loan, loans sanctioned on Reimbursement basis and takeover from other banks
o
Home Loan up to Rs 5.00 lac for a maximum period of 20 Years:

Margin - 10% No processing charges and pre payment charges / penalty Free Personal Accidental Death and Property Insurance Cover
Free Life Insurance cover equivalent to the loan amount
Home Loans above Rs 5.00 lac and upto Rs 20.00 lac for a maximum period of 20 Years

Margin - 15% There shall be no processing charges and pre payment charges / penalty
Free Personal Accidental Death and Property Insurance Cover.
Free Life Insurance cover equivalent to the loan amount
As security against the loan amount, the bank will take an equitable mortgage of the housing property and/or other suitable securities.
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No Fees will be charged on part prepayment / full prepayment of the loan amount from own sources.
The loan can be repaid in a maximum period of 15 / 25 years taken under fixed / floating rate option subject to the period up to age of retirement in case of salaried persons and 65 years in case of others.
In case of full prepayment or foreclosure (other than from own sources) fees will be charged at 0.5% for each year of the residual period subject to maximum of 2%.
RATE OF INTEREST:
Flexi rate option is available. This will facilitate to hedge interest rate risk.
0.25 bps concession in rate of interest is available to employees of preferred organizations and group borrowers (list of preferred organizations is available at branch level).
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Canara Bank home loan products are designed to help you acquire the dream home u wished to buy. Come to Canara bank and get housing loan at most competitive interest rates and the most convenient loan procedure to make the loan process less tiresome. Canara bank has a legacy of over a century in specialized bank services and a branch network of more than 25000 branches that ensures nothing but the very best services to all customers. Canara Bank housing loans details:The housing loans by Canara bank are provided for various purposes including: For repair or renovation in residential house or flat For purchase of residential property or land For construction on residential land For repayment of home loan for any other housing finance institution. The loan process involves an application form available in the Canara Bank Branches and also online on the canara bank website. Then comes the security the bank demands for sanctioning any loan. This can be mortgage of a house or a flat owned. Canara Bank home loan rates The rates of interest offered on Canara Bank home loans are highly competitiveand easily affordable. Page 44 of 64
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Citibank Home Loans in India give Home Loans from Rs 2.1 Lakh to Rs 5 Crore, which can be returned in 25 years. Citibank is fully dedicated to make your dream of getting a home come true. Eligibility criteria for salaried and self-employed person are different. Salaried person is eligible to take loan if he has gross annual income of Rs 1, 00,000 or above, with age between 23 and 58 years and at least 2 years of work experience. Whereas a self-employed person can have home loan if his gross annual income is Rs. 85,000 or above, age between 23 and 65 years along with 3 years of continues experience. The home loan is given with the tenure of at the max 25 years and can be repaid by anyone following way through EMI (Equated monthly Installments) as
o o o
Post dated Cheque (PDC) Standing Instruction (SI) provided by Citibank banking account Electronic Clearing System (ECS)
There are different types of home loans available in market by different banks and Housing Finance Companies:
o o o o o o
Bridge Loans Home Construction Loans Home Improvement Loans Home Purchase Loans Home Extension Loans Home Conversion Loans Page 45 of 64
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Land Purchase Loans
Bridge Loans are taken if you are buying your home and purchasing the new one. This loan taken fills the gap till you sell your home. Land purchase and Home Purchase Loans respectively taken to purchase land and home. Home Construction Loan as the name suggests is taken to construct a home and Home Extension Loan helps to extend already constructed home.
Citibank Home Loans can be taken for:

o o o
Property under construction Self-Construction Plot plus self construction
You can apply online for the loan from Citibank. The online provision will also help you to view the status of post dated cheque, repayment details and can also be used to get Interest Certificates online. To customers, bank also gives QPIN that is used to check your Home Loan Account online. Citibank also offers Students a loan that helps students in their studies. Citibank under property power package offers loan against property from Rs. 2.10 Lakh to Rs 2 Crore for up to 15 years. Citibank has worldwide service centers for NRI. In India it has branches all over the nation with ATM facility. The new feature of Touch Screen Banking is made at the ATM of this bank. The address of any branch is available online in their website. Personal loan between Rs. 40,000 and Rs. 10 Lakh can be availed. The amount will depend on your profile with competitive interest rates. EMI calculator is also present for each type of loan with which you can easily calculate your installment online. Page 46 of 64
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The world's local bank

Save with Smart Home
At HSBC, we understand that buying a home is a long-term financial commitment. Smart Home is a simple way to use your savings smartly, by letting you decide how much interest to pay. Repay your loan sooner. Smart Home offers competitive home loan interest rates and more.
Know more

Features & Benefits Eligibility and Documents Required Calculate your Savings FAQs
Smart Home Features & Benefits

Save up to 50% on interest payments
With every Smart Home, you get a current account. All you need to do is put your usual savings, from other accounts, into the Smart Home Account. Depending on the savings you put into the Smart Home Account, you can reduce the quantum of interest paid by up to 50%. The example below shows how much interest is reduced, with a monthly saving of just Rs. 6,000, over and above your EMI.
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Standard Loan Home Loan Amount (Rs.) Interest Rate Original Tenor Actual EMI's Total Interest (Rs.) Saving in Interest (Rs.) Savings in Tenor (months) 25 lakhs 8.50% p.a.* 20 years 240 27,06,939
Home HSBC's Home 25 lakhs 9.00% p.a.* 20 years
Smart
143 (40% less) 16,11,087 10,95,852 (40%) 97 (40%)
* Interest rates are merely indicative which can change from time to time depending on market conditions.
The shortened loan tenor and savings require monthly payments and the accumulation of monthly savings of Rs. 6,000 in the Smart Home account. The interest rate on your Smart Home is linked to HSBC's Retail Lending Rate (RLR) and any revision in the RLR would impact your interest rate. The RLR is 13.75% effective from July 03, 2009.
Tax benefits
Smart Home customers are eligible for certain tax benefits on principal and interest components of a housing loan under the Income Tax Act, 1961*.
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LIC Housing Finance Limited was incorporated on June, 19, 1989 and promoted by the Life Insurance Corporation of India. As one of the leading players and an earlier entrant in the market for housing loans, LIC Housing Finance Limited boasts of an extensive distribution network. LIC offers home loans for construction/purchase of house/flat and also for renovation of existing flat/house. While LIC Griha Prakash and are for purchase, construction of properties and extension of residential units, LIC Griha Sudhar Loan facilitates repairs/renovation of properties.
LIC Housing Finance provide loans for
Purchase / construction / repair and renovation of new / existing flats / houses.
Finance for existing property for business / personal needs Loans to professionals for purchase / construction of Clinics / Nursing Homes / Diagnostic Centers / Office Space.
Loans to Corporate Bodies and Companies under different schemes for purchase / construction of office premises for their own use, construction of staff quarters and also for onward lending to meet the requirements of employees
Loans to Property Builders and Developers for residential and commercial projects.
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Eligibility criteria for resident Indians:

Minimum age 21 years as on the date of sanction. You must be in permanent service or engaged in a profession or business. A stable job and regular income.
Eligibility criteria for NRIs:

Minimum age 21 years and Graduate Valid Indian Passport (for NRIs)/ valid foreign passport (for PIOs) Steady source of income. Valid job contract or works permit.
Rate of Interest:
The Interest Rate depends on the purpose for which the housing loan is taken which could be for the purchase of a new house, existing house from second owner, construction of house, renovation, etc.
Loan Amount:
Loan amount is determined on the basis of the repayment capacity of the applicant/s. Repayment capacity takes into consideration factors such as age, income, savings, assets, stability of occupation and continuity of income, dependents, liabilities, etc. In LIC Griha Prakash scheme, the maximum loan can go up to Rs 1 crore starting from Rs. 25,000. The minimum is Rs.1, 00,000 and maximum is Rs.1, 00, 00,000 for Griha Laxmi. In both cases, the home loan finances go up to 85% Page 50 of 64
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of the cost of the property including agreement value, stamp duty and registration charges. For purchase of a site/ vacant plot, the minimum is Rs.50, 000 and maximum is Rs. 20, 00,000. LIC Griha Sudhar Loan offers a maximum loan amount of up to Rs.10 lacs and the loan to property cost shall not exceed 85% of the cost of repairs or 25% of market value of property, whichever is lower. The company finances up to 85% of the total cost of the property including Stamp Duty and Registration Charges. For security purposes, you will need to provide:

An equitable mortgage of house/flat One guarantor
Repayment
Repayment Mode: Equated Monthly Installments (EMI) Monthly Rest Basis
Repayment of the loan for resident Indians is permitted for a maximum period of:
20 years for Griha Prakash or Retirement Age, or 70 years of age, whichever is earliest?
15 years for Griha Laxmi and Griha Sudhar or Retirement Age, or 70 years of age, whichever is earliest.
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The maximum duration for repayment of loans for NRIs is

10 years under'Griha Shobha' and 15 years under 'Griha Laxmi'
However, the term for the loan will under no circumstances exceed the age of retirement or completion of 65 years of age, whichever is earlier. For NRIs, the maximum term is restricted to seven to 10 years. Processing fees:
Processing fees (non-refundable) is 0.5 per cent of the amount applied for, subject to a maximum of Rs 5,000.
Administrative fees (non-refundable) is charged at the rate of 1 per cent of the loan sanctioned.
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SBI HOME LOANS

"THE MOST PREFERRED HOME LOAN PROVIDER" voted in AWAAZ Consumer Awards along with the MOST PREFERRED BANK AWARD in a survey conducted by TV 18 in association with AC Nielsen-ORG Marg in 21 cities across India. SBI HOME LOANS now offers Interest Rates concessions on GREEN HOMES in accordance with SBI's commitment to Environment protection. SBI Home Loans come to you on the solid foundation of trust and transparency built in the tradition of State Bank of India. Best Practices followed in SBI mentioned below will tell you why it makes sense to do business with State Bank of India.
SBI Home Loans Unique Advantage

Package of exclusive benefits. Lowest interest rates. Further, we charge interest on a daily reducing balance!! Low processing charges. No hidden costs or administrative charges. No prepayment penalties. Reduce your interest burden and optimally utilize Page 53 of 64
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your surplus funds by prepaying the loan. Over 12000 branches nationwide, you can get your Home Loan account parked at a branch nearest to your present or proposed residence.
PRODUCTS
SBI HI-FIVE LOAN SBI EASY HOME LOAN SBI ADVANTAGE HOME LOAN
SBI HI-FIVE LOANS SBI Hi-Five is available up to 31st March 2010 Amount Term Maximum Rs.5 Lacs Maximum 120 months (i.e. 10 years) including moratorium period. Interest Rates 8% p.a. Fixed interest rate during first 60 months. 61st month Onwards - floating at 2.75% below SBAR
Or
Fixed interest at 1.25% below SBAR
PROCESSING FEE
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The revised processing fee structure (including service tax) from 9th November 2009 is as under: Loan Amount Upto Rs.5 Lac Processing Fee(Revised) Rs.1000/-
SBI EASY HOME LOAN FOR LOAN AMOUNT UPTO Rs. 50 Lacs
SBI Easy is available up to 31st March 2010 Getting your dream home has become easier with SBI Easy Home Loan. With low interest rates for home loan under Rs. 50 lakhs category, SBI Easy ensures that you are not burdened with high interest for your home loan. Plus with over 12000 SBI branches nationwide you can get your Home Loan account parked at a branch nearest to your present or proposed residence.
INTEREST RATE
Interest rate during the first year (i.e. till first anniversary date from
the date of first disbursement) is fixed at 8% p.a.

Interest rate during next two years is fixed at 8.5% p. a Interest rate after three years may be Fixed or Floating as per the
borrowers choice made at the time of sanction. If floating rate option is chosen, then the rate will be 2.75% below SBAR. If fixed rate option is chosen, then the rate will be 1.25% below SBAR prevailing on the third anniversary date from the date of first disbursement, and shall have a Page 55 of 64
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reset frequency of 5 years from the third anniversary date of the loan. Fixed interest rate shall be subject to force-majeure clause.
PROCESSING FEE
The revised processing fee structure (including service tax) from 9th November 2009 is as under: Processing Fee(Revised) Rs.1000/-
Loan Amount
Upto Rs.5 Lac
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 Rs.7,000/-
SBI ADVANTAGE HOME LOAN FOR LOAN AMOUNT ABOVE Rs. 50 Lacs
SBI Advantage is available up to 31st March 2010
SBI Advantage Home Loan with competitive rates of interest is available for home loans above Rs.50 lakhs. Plus with over 12000 SBI branches nationwide you can get your Home Loan account parked at a branch nearest to your present or proposed residence. Page 56 of 64
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INTEREST RATE
Interest rate during the first year (i.e. till first anniversary date from
the date of first disbursement) is fixed at 8% p.a.

Interest rate during next two years is fixed at 9% p. a Interest rate after three years may be Fixed or Floating as per the
borrowers choice made at the time of sanction. If floating rate option is chosen, then the rate will be 1.75% below SBAR. If fixed rate option is chosen, then the rate will be 0.75% below SBAR prevailing on the third anniversary date from the date of first disbursement, and shall have a reset frequency of 5 years from the third anniversary date of the loan. Fixed interest rate shall be subject to force-majeure clause.
PROCESSING FEE
The revised processing fee structure (including service tax) from 9th November 2009 is as under: Processing Fee(Revised) Rs.8,000/Rs.10,000/Rs.20,000/-
Loan Amount
Above Rs.50 Lac and upto Rs.1 Cr Above Rs.1 Cr and upto Rs.5 Cr Above Rs.5 Cr
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At India bulls Housing Finance Limited, we understand how special creating a new home is for you, and India bulls Home Loans helps you lay the foundation for your dream home. Consider yourself at home with India bulls Home Loans. While owning a house of ones own is a cherished dream for most individuals, it is also a major decision involving a large investment, a responsibility for which Indiabulls is ever ready to provide the best financial help. Indiabulls Home Loans helps you realize your ultimate dream of creating your own haven by a simple, sure and safe home loan scheme. At Indiabulls, We understand how it feels to have a place to cherish as your own home.
THE BENEFITS OF TAKING A HOME LOAN.

The income tax authorities look with favour upon those servicing a housing loan from specified financial institutions. And, it is up to you to be wise enough to take advantage of this.
LET'S START WITH SECTION 24 OF THE INCOME TAX ACT.

Interest paid on capital borrowed for the acquisition, construction, repair, renewal or reconstruction of property is entitled to a deduction. Rs 1,50,000 is the
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maximum amount eligible for deduction in the case of self-occupied property and for Rented out property there is no limit of amount of deduction.
THAT BRINGS US TO SECTION 80C OF THE INCOME TAX ACT.

You get a maximum Rs.1,00,000 deductions from the Income, on repayment of principal during a financial year. Stamp duty, registration fee or other such expenses paid for the purpose of transfer of such house property to the assessee is also considered under this amount.
KEY FEATURES OF HOME LOAN

Attractive Interest Rates. Tenure can range upto 20 years for Housing Loan. Easy Monthly repayment mode. Loans to salaried and self employed. Borrow home Loan upto Rs.50 Lacs and for commercial property upto Rs.40 lacs.
Insurance Option available for your house loan. Speedy Loan Approvals.
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Market share of the Players in Home Loan Market
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Vital Tips for Home Loans

To increase your loan eligibility, combine your income with that of your spouse, children or parents Always negotiate - the first home loan interest rate quoted is never the final rate Before paying the loan processing fee request lender for preliminary check on the property Buy Loan Protector Life Insurance - ensure your family can use the house if you are not alive Immediate disbursement get best rates talk to home loan providers when you are close to finalizing your property
How much loan to take?

Please consider the following factors before deciding upon the size of your loan: A. Income You need to consider the amount of money that you earn as well as the stability of your income. Many people choose to take a more expensive home upfront as they think that their income will increase as a result of their income growth and career progress. This will make even large EMI payments an ever decreasing percentage of their monthly expenses. Page 61 of 64
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Some of the questions that you need to answer before making this decision are:
How much increase do you expect on a yearly basis? How confident are you in getting this raise?
Is there any risk of you losing your job such that you might not be able to afford to pay the EMI?
What are your chances of getting a new job in case you lose your present one?
Will large EMI payments interfere with your goals of retiring early, taking a mid career break, or even paying for your children's education and marriage?
Will your spouse continue to work and financially contribute to the household during the tenure of the home loan?
Do you expect to get a lump sum bonus or variable pay at the end of the year that can be used to fund your home purchase
Have a realistic view of what your income and career prospects can support don't be over optimistic about your future income. B. Personality No two people have the same personality or attitude towards debt. Some people can sleep soundly at night knowing that they owe Rs.30,000 per month for the next 25 years. Other people worry about taking a loan for such a long tenure.
Know your personality type can you live with a big loan or would you feel safer with a small loan?
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C. Expenses The home loan lender calculates your loan eligibility based on your current debt and monthly expenses. You must identify whether you might have other expenses that you currently do not have, but expect to incur in the near future.
Do you have plans to buy a new car? Where will you fund the EMI for the car from?
Have you planned for your children's college education and marriage? Will you need money for these activities, and will you still have enough to pay fund these after your home loan EMI?
D. Lifestyle In life one has to prioritize one's goals and activities to achieve what is important to us. Are you willing to change your lifestyle to get the house you want? Maybe if you cut your spending a little, the bigger loan just might be within your reach. Ask yourself whether you and your family can handle:

Fewer shopping trips to the mall Less frequent expenditure on entertainment movies, eating out, latest cell phones
Fewer vacations, or take a domestic vacation instead of going abroad
Sometimes you do not realize how much of your money is going towards useless expenditure. If you can cut down on this, then maybe you can afford a bigger home loan. Discuss with your family the pros and cons of taking a bigger loan and cutting down your family's lifestyle related spending. And do remember that it always pays to compare home loans before taking any decision. Page 63 of 64
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Bibliography
www.rbi.org.in www.indiahousing.com www.google.com www.statebankofindia.com www.icicibank.com www.hdfcbank.com www.apnaloan.com www.axisbank.com www.lichousing.com
Page 64 of 64

Home Loan Project Final (Arun)

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Home Loan Project Final (Arun)

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ANALYZING THE HOME LOAN MARKET AND DIFFERENT PLAYERS IN THE MARKET VIS-A-VIS THEIR MARKET SHARE.

An Introduction to Home loans

1. What is a Home loan?

3. Are there any specific loans available for NRIs?

4. What is reverse mortgage?

Loan Eligibility & Cost

3. What are the factors included in the total loan cost?

4. How much loan can one avail?

7. When can one take a home loan?

8. Can one have a co-applicant for a home loan?

9. Who is eligible to be a co-applicant?

10. What is EMI? How is it calculated?

12. What are the different types of interest rates available?

13. What is an amortization schedule?

15. Can one avail a tax rebate on my home loan?

16. What are the loan tenure options?

3. If a loan application is rejected, does that reflect on my record?

ii. Salaried Individuals:

5. Is it a must to apply for insurance cover for ones property?

6. What is a No Objection Certificate?

7. When does a property become `pre-approved?

Processing the loan

4. How soon will one get my loan amount?

Different Player in the Home Loan Market.

The Various policies or terms of ICICI Home Loans are:

Home Loan Counseling - Sharing of over 30 years of home loan experience

Door Step Service

We help you find your dream home

Wide Product Range

Multiple Repayment Option

Flexible Loan installments Plan

Tranche Based EMI

Accelerated Repayment Scheme

Wide network of financing

Post Disbursement Services

Features of PowerPlus scheme

Axis Bank Home Loan Details

Axis Bank Home Loan Documents

Identity proof photograph)

(Indian Passport/voter card/driving license and

What is the current FLOATING RATE OF INTEREST?

Housing Loans for Agriculturists, Business & Selfemployed persons

Rate of Interest for Loans Sanctioned w.e.f., 25.07.2009

Home Loan is available for:

Repayment period up to 25 years (floating rate option).

Bank offers following benefits with home loan availed by you:

Terms & Conditions

Special Home Loan Package: On home loans sanctioned on or after

Home Loan up to Rs 5.00 lac for a maximum period of 20 Years:

Free Life Insurance cover equivalent to the loan amount

Free Personal Accidental Death and Property Insurance Cover.

Free Life Insurance cover equivalent to the loan amount

Land Purchase Loans

Citibank Home Loans can be taken for:

Property under construction Self-Construction Plot plus self construction

The world's local bank

Smart Home Features & Benefits

Home HSBC's Home 25 lakhs 9.00% p.a.* 20 years

143 (40% less) 16,11,087 10,95,852 (40%) 97 (40%)

LIC Housing Finance provide loans for

Purchase / construction / repair and renovation of new / existing flats / houses.

Eligibility criteria for resident Indians:

Eligibility criteria for NRIs:

An equitable mortgage of house/flat One guarantor