Any person, including Non Resident Indians, with a steady source of income can borrow funds for financing the cost of a flat from housing finance companies and banks.
You can apply for a home loan even before you have selected the property. The loan amount would be sanctioned or approved for you, based on your repayment capability.
Yes. Repayment of loan should be made within a period not exceeding 20 years out of inward remittances or out of funds held in the borrower’s NRE/FCNR/NRO accounts.
Types of loans :
Home improvement Loans.
Home Construction loans.
Home Equity Loans.
Home Extension Loans.
Home Conversion Loans.
Loan to NRIs.
All of these are available on an adjustable rate or fixed rate.
You can get a home loan starting from Rs. 2 lakh (Delhi, Mumbai & Bangalore). The loan amount depends on your repayment capability and is restricted to a maximum of 85% of the cost of the property or the cost of the construction as applicable. The balance 15% cost of the flat is to be funded by the flat purchaser from his own contribution.
Repayment capacity takes into consideration factors such as income, age, qualifications, number of dependants, spouse’s income assets, liabilities, stability, continuity of occupation and saving s history.
Equated Monthly Installment (“EMI”) is the amount comprising a portion of the interest and the principle loan amount which is payable by a borrower to the lender every month.
Interest rates vary from time to time and from institution to institution. There are two schemes,
Fixed Rate Home Loans.
Adjustable Rate Home Loans.
The current trend ranges from about 11.5% to 13% pa. Under the Fixed Rate Home loans the rate applicable on the date of disbursement remains fixed during the entire duration of the loan. If you opt for an Adjustable Rate Home Loan, the interest rate would vary with the bank Home Floating Reference Rate.
A fixed-rate housing loan is a loan where the rate of interest is constant through the entire term of the loan period.
A floating interest rate loan is a loan where the interest rate payable is linked to the market conditions such as the bank retail prime lending rate and rises and falls with the bank rate varies. Hence a borrower bears the risk of interest rate fluctuations. Floating interest rates offered are usually lower than the fixed interest rates.