MahalaxmiBuildhome Ltd.
Buyers Guide
Loan Enquiries
Home Loan
To be eligible for a home loan, the applicant must be at least 21 years of age with a regular source of income from employment or self-employment. The loan must terminate before or when the applicant turn 65 years of age. The applicant should also posses at least 6 months of income proof.
Loan Amount
The loan amount depends on a number of factors such as age, income, number of dependents, qualifications, assets and liabilities, income stability, business, profits, etc.
However, there are ways in which to increase loan eligibility and amount. If a spouse or fiancée is earning, applying together as co-applicants can increase chances of a larger loan amount. In such cases, proof of marriage must be submitted. On the contrary, if there are any co-owners they must necessarily be co-applicants. Providing additional security like bonds, fixed deposits and LIC policies may also help to enhance eligibility. However, the most important factor in sanctioning loans is repayment ability. The total cost includes registration charges, transfer charges and stamp duties.
Documents Required for Home Loans
Documents required for self-employed persons:
- Updated pass book or Xerox copy of the applicants statement of accounts for the past 6 months
- A Xerox copy of the applicants ration card
- A profile of the applicants business mentioning at least the nature of the business, client list, suppliers, employee strength, geographical spread, etc.
- In the case of a business partnership a copy of the partnership deed, 3 years P & L a/c, B/S, computation of income certified by a CA and individual computation of income and tax returns for last 3 years is required
- In the case of a proprietor or professional 3 years P & L a/c, B/S, computation of income certified by a CA and an income tax return file statement for 3 years is required
- If the company applying for a loan is a Pvt. Ltd. a remuneration certificate, the board resolution for fixing remuneration, the company's annual report and individual IT returns for last 3 years is required
Documents required for employed persons:
- Latest salary certificate or the original slip
- A Xerox copy of Form no.16 A (TDS Form) from the applicants Employer
- The original certificate from the applicant’s employer for any other allowances that are not reflected in the applicants salary slip
- A Xerox copy of the applicant’s updated bank pass book or a statement of the applicants accounts for last 6 months
- A Xerox copy of the applicant’s voter I.D. card or the applicants Company's I.D. or the applicant’s passport/ ration card
- A passport size photograph of the applicant & co-applicant
Disbursement
The loan will be sanctioned after the selection of property and submission of the required legal documents. The process might take some time as each document needs to be verified for the safety of the applicant. The 230 A Clearance of the seller and / or 37I clearance from the appropriate income tax authorities (if applicable) is also needed. Once the above has been submitted and verified, the registration of the conveyance deed and investment of the applicant's own contribution and the loan amount will be disbursed by the bank. The disbursement will be in favor of the builder.
Documents required for disbursement:
- Loan agreements
- Disbursement requests
- Post-dated cheques
- Personal guarantors’ document
Tax Benefits
When buying a property with loans from specific financial institutions, tax authorities provide certain benefits and exemptions from tax payments.
Section 24 of the Income Tax Act states that an investor is allowed to deduct an amount equivalent to the total interest payable on the housing loan from his/her taxable income within the same financial year. If an investor were to take a loan, he/she would receive a deduction of up to 1.5 lakhs on the interest rate paid. The only concern is that the property would have to be bought or constructed within 3 years from the end of the financial year in which the loan was taken and would have to be self-occupied.
According to Section 80c of the Income Tax Act: A deduction u/s 80C (2) (xviii) is available on repayment of the principal during a financial year of up to Rs. 1,50,000/-, this aforesaid limit is within the overall limit of Rs 1.5 lakh, specified in section 80C of the Income Tax Act. 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. This deduction is taken from the Gross Total Income.