Home Loans in India
The Home loan sector
in India is the pi-votal role player in the growth of the
real estate scenario in India. With tax incentives given to
the housing finance sector in the annual budget of 2001, transactions
related to buying and selling of residential properties increased
considerably and was much higher as compared to previous years.
Since the new class of buyers are relatively younger set of
customers who are more aware about legal documentation and approvals,
buyers are now more 'end-users' rather than investors; the property
market in India undergoes transformation to align itself with
global standards with an increased emphasis on quality &
cost control and documentation methods. In the current economy
of India, the real estate sector has the maximum propensity
to generate income and demand for materials, equipment and services.
It can be said that housing
finance companies were formed for co-existing with buyer's
requirements of housing loans for investing in properties. Home
loans are made available by financial institutions to both Indian
and NRI customers
at floating and fixed rate of interest and also at attractive
EMI options.
- For construction or buying a new home
- For home repairs and renovations
- For purchase of plots
- Against mortgage of property
No tax benefits are available for NRI customers unless you file returns and thereby become eligible to avail
of the tax benefits.
Besides home loans, Commercial
property loans are also available and different financial institutions
in India provide commercial loans at different rates and different upper
limits.
Real estate loans are available to builders, promoters
and real estate developers. The experience and financial standing of the
builders is taken into account before the loan is granted which is to
be returned with the minimum installments.
Today, the amount of money that a city dweller spends
on rent is roughly the same, or only slightly less than the
amount he pays as an EMI on a housing loan. Earlier the home
loan sector in India was solely dependent on nationalized and
public sector banks, but the entry of public sector banks into
the housing finance business marked the beginning of the first
round of interest rate cuts. And this reduction in interest
rates has enhanced the borrowing power of customers. Moreover,
HFCs are offering incentives to attract investors like
- Some companies sanction the housing loan without requiring
you to identify property as a pre-requisite for eligibility
- Free accident insurance & property insurance
- Waiving of pre-payment penalty
- Waiving of processing fee
There are a few documents which the finance companies require
for setting up criteria for eligibility of Home loans.
| Salaried
Employee |
Self-employed |
|
The latest salary slip showing statutory
deductions |
Computation of income for the previous
two years, certified by a Chartered Accountant |
|
Form 16 (showing tax deducted at source
by employer) |
Profit & Loss Account and Balance
Sheet for the previous two years, certified by a Chartered
Accountant |
|
Proof of age (birth certificate/voter
identity card/passport/school-leaving certificate/valid
driving license |
Proof of age (birth certificate/voter
identity card/passport/school-leaving certificate/valid
driving license) |
|
Proof of residence (phone bill/electricity
bill/ration card). |
Proof of residence (phone bill/electricity
bill/ration card). |
The realty boom in India has given a new dimension to the
finance sector in India - both in Home Loans and Home
Insurance segments. This has not only given a competitive
edge to the finance companies to provide attractive options
to customers but has also contributed to the increased investments
in the real estate sector. This has resulted in 13 new institutions
foraying into the housing finance business in the last three
years.
| Major
Home Loan Providers
|
|
Banks & Public Sector Housing Finance
Companies |
State Bank of India, Corporation Bank,
Punjab National Bank, Central Bank, Dena Bank, Allahabad
Bank, Bank of Maharashtra, Bank of Baroda Housing Finance,
Can Fin Homes, GIC Housing Finance, LIC Housing Finance,
PNB Housing Finance, SBI Home Finance, Centbank Home
Finance, HUDCO, LIC, etc. |
|
Financial Institutions |
HDFC, ICICI Ltd, Citibank, HSBC, StandardChartered-
Grindlays, IDBI Bank, etc |
|
