Owning a home is perhaps the biggest and most important dream of an average family therefore ownership of a home goes beyond pure financial considerations. Home loan purchase has witnessed an increase owing to competition between a number of public and private players. The cut in the loan interest rate has also fuelled the demand for this product.

Kind of Home Purchase Loan Interest Rates:

• Fluctuating Home Purchase Loan Interest rates: Keep changing with change in the prevailing market rate or the prime lending rate.
• Fixed Loan Interest Rate: As the name suggests, do not change during the entire loan period, irrespective of the prevailing market rate. generally fixed loan interest rates are higher than the fluctuating loan rate.

The current scenario in India is that of declining interest rate, so a fluctuating interest rate makes more sense. The loan is repayable in the form of equated monthly installments (EMI). The EMI should not exceed 50 per cent of your monthly household income.

Interest Rate on Home Purchase Loan:

Home Purchase Loan interest rates depend on a number of factors :

• The tenure for which the loan is taken
• Loan amount
• Type of housing loan taken
• Type of customer and his repayment capacity
• Loan policy of different companies. Interest rates will be different for private sector and public sector players. Companies lower the interest rates during festive seasons.

Maximum Home Purchase Loan Given Depends On:

• Individual loan policy of different companies. The maximum amount of loans given is however 85% of the value of the property (inclusive of cost of land)
• Repayment capacity of the customer
• Maximum term of home purchase loan
• The term of home purchase loans offered is maximum 25 years. This again depends on the repayment capacity of the individual

Number Of Loan Applicants:

A loan can be taken either on an individual or joint basis. Some companies necessitate that proposed owners be co-applicants, however, co-applicants need not be co-owners.

Other Home Purchase Loan Costs:

Besides the interest rate, customers also have to bear the processing and administrative charges which increase with the cost of the loan. If two housing finance corporations give you the same amount of loan but at different interest rates, calculate what works out better for you.

Home Purchase Loan Application Process:

An individual/company/professional can apply for home purchase loan in different home loan corporations by filling the application form. These days companies provide online forms for customer convenience. There is certain information that one must furnish in order to qualify to approval of home loan.

Documents Required for Approval of Home Purchase Loan:

Businessman/ Self employed professional:

1. Application form with photograph
2. Educational qualification
3. Identity and residence proof
4. Proof of business existence with business profile and last three years income tax return
5. Last 3 years income statement and balance sheet.
6. Last 3 month's personal and business bank statements.
7. Processing fee check

Salaried customers:

1. Application form with photograph
2. Identity and Residence proof
3. Latest salary slip
4. Form16
5. Last 6 months bank's statement
6. Processing fee cheque.

List of Leading Banks providing Home Purchase Loan:

* Terms and conditions may vary from bank to bank

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Disclaimer : This is an information based website, meant for providing assistance to it's readers. The information has been gathered from a number of secondary sources, we do not hold any responsibility for mis-information or mis-communication.