smp world

HOME LOAN

What are the factors you should keep in mind before getting a home loan?

The main criteria are:

  • Your income and your track record of repaying previous loans – this is obtained from the Credit Bureau.
  • Your current expenses including other loans you are servicing. The amount of loan related to the property value. All these outgoings should not exceed 65-70% of your total income.
  • Ownership of the property – this means that the lending bank should be comfortable that the seller has full and complete ownership of the property.
  • Getting a loan depends on the report of the local bank surveyor who will inspect the property and give his recommendation.
  • Home loan eligibility depends on your ability to pay (ie. based on your salary) and not on the age of the building. However, the quantum of loan depends on age and undivided share too, in addition to your repayment ability.

What are the advantages and disadvantages of getting a home loan insured? Is it necessary to get property loan insured?

It is always better to get the property loan insured. We rather recommend a big term plan of Insurance Policy to safeguard future problems.

Do you get tax benefits on loan?

Yes, tax benefit on repayment of housing loan is available as per section 80C of the Income Tax Act, within the overall limit of Rs 1 lakh on the principle amount and as per section 24(E) on the interest paid upto rs. 2.50 lakh as per present govt. policy.