Buying a property necessitates in
depth knowledge of real estate and choosing the right kind of loans. Several
banks are stepping up their exposure to real estate. These banks are entering
into agreements with builders for real estate loans. The scheme mainly caters
to builders / promoters / developers of real estate. According to RBI figures
loans to builders, along with retail credit (like home loans, credit cards and
personal loans) constitute a big chunk of banks total loan portfolio.
Maximum
Amount of Real Estate Loans granted
Banks normally give real estate
loans to builders / real estate developers of repute. Experience of 3-4 years is
a must to avail the loan. The quantum of loan is decided after scrutinising the
financial statements and cash flow statement of the applicant. The maximum
amount of loan varies from case to case and from bank to bank. Repayment is
done in lump sum installment after the completion of project / selling of the flats. The number of installments is restricted to 3 to 4.
Interest
Charged by Banks on Real Estate Loans
The interest rate is normally
determined and charged according to the prime lending rate of the bank.
Builders can either opt for a fixed or floating rate of interest.
Process
of Loans Applications
Builders / real estate developers
can fill up the loan application either in person or utilise online facilities
and apply for loan. A nominal processing fee is charged by the banks.
Documents
required for Real Estate Loans:
1. Application form with photograph
affixed thereto.
2. Copies of certificates
Educational qualifications.
3. Residence proof
4. Proof for existence of business
and business profile with last three years income tax return.
5. Last 3 years income and
expenditure statement and balance sheet.
6. Last 3 months personal and
business bank statements.
Terms and conditions of loan may
vary from bank to bank.
Mortgage
loans
Banks provide loans against mortgage of property. Businessmen, self employed professionals, salaried persons are all
eligible to apply for the loan. It enables the borrower to apply for loan
against a fixed asset.
Maximum amount of mortgage loans
granted
The maximum amount of loan depends
on a number of factors, like customer's profile, his financial status and
repaying capacity, tenure of the loan etc. The repayment tenure increase or
decreases with the quantum of loan. Repayment of loan shall be made through
Equated Monthly Installments or EML
Interest Charged by Banks
Interest is charged at the
predetermined rate as per the terms and conditions. Interest can be either on
fixed or floating rate basis. Interest rate can be discounted for existing
clients and in special cases according to the policies of the bank.
Process of Mortgage Loan
Applications
Customers can apply for mortgage
loans by filling an online form. They can also visit the nearest branch of a
particular bank. Normally, banks charge 1-2% of the actual loan amount as
processing fee.
Documents required for approval of
mortgage loans Salaried Individuals
1. Proof of identity (passport copy
I voters ID card I driving license)
2. Address proof (ration card Tel I
Elect. Bill, passport copy)
3. Bank statements (latest 6 months
bank statement I passbook)
4. Latest salary slip of current
dated salary certificate with latest form 16 under Income tax Act, 1961.
5. Proof of ownership of fixed asset
being mortgaged.
Self employed professionals and
businessmen
1. Proof of identity (passport copy
I voters ID card I driving license)
2. Address proof (ration card Tel I
Elect. Bill I passport copy)
3. Bank statements (latest 6 months
bank statement I passbook)
4. Latest IT return along with
computation of income, B/S & P & L alc for the last 2 years duly
certified by a chartered accountant.
5. Qualification proof of the
highest professional degree.
6. Proof of continuation of
business(Trade license I establish- ment I sales tax certificate)
7. Other mandatory documents (sole
proprietorship. Declaration. Or certificate, copy of partnership deed, Cert.
copy of MOA, AOA & Board resolution.)
8. Proof of ownership of fixed asset
being mortgaged.
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