Pre Home Loan Review is quite a tricky exercise. You have to judge and decide home loan provider based on a couple of pre home loan interactions. The problem is that you cannot apply with multiple home loan providers. For simplicity purpose, i will address home loan providers including HFC’s as Banks only. In my post, How i am responsible for my low CIBIL Score i shared if you apply with multiple banks then it will impact your CIBIL Score. With this context, Pre Home Loan Review becomes more critical.
When i availed home loan, i did this exercise of Pre Home Loan Review with top 5 lenders i.e. HDFC Ltd, SBI, LICHFL, ICICI Bank & Axis Bank. In this post, i will share my experience rather Pre Home Loan Review of top 5. I will keep it short, sweet and crispy. I will share the Pros and Cons of each home loan provider based on my personal experience along with a small brief on same. Let me also clarify that every borrower has a different experience with home loan providers. It also depends on the branch, employee, DSA, city etc. The Pre Home Loan Review shared by me is based on my personal experience and it is not universal. Some of the points are universal in nature and does not vary from branch to branch. For example, a home loan from HDFC is from HDFC Ltd not from HDFC Bank.
Pre Home Loan Review of HDFC, ICICI, LIC, SBI and AXIS
1. HDFC Ltd: The biggest misconception among all Home Loan borrowers is that Home Loan from HDFC is from HDFC Bank. Let me clarify, HDFC Bank Ltd and HDFC Ltd are 2 different financial institutions. They have separately listed companies on the stock exchange. They can be considered as sister concerns but there is no direct connection as such. HDFC Bank is governed by RBI and HDFC Ltd is Housing Finance Corporation governed NHB (National Housing Bank). Finally, i availed Home Loan from HDFC and has shared my detailed experience in my post, Home Loan Experience with HDFC Ltd. In this post, i am just listing down Pros and Cons based on my pre home loan interaction with HDFC
Pros:
(a) Oldest Home Loan Lender in India with experience of more than 30 years
(b) Dedicated Network of Branches for Home Loan Servicing across India
(c) In-house panel of Lawyers for Legal Verification
(d) Online Access of Home Loan Account
(e) Offer lowest interest rates at par with SBI and ICICI Bank
Cons:
(a) Very Poor Service by DSA & Branch.
(b) Hidden Charges for Loan Processing like 0.1% of loan amount as stamp duty for MODT. I was not aware of same at the time of pre home loan interaction. It inspired me to write a post, 15 Home Loan Hidden Charges.
(c) Call Center is good for nothing because agents don’t know anything about Loan Account. They will simply refer you to the Branch Manager from where the loan is processed.
(d) DSA’s don’t entertain you after collecting Processing fees cheque and No one picks up the phone in the Branch. The employees will not share mob no. During my physical presence in the branch, the landline was continuously ringing but no one was picking up. In a nutshell, you land in no man’s land after paying processing fees.
(e) Very Rude and not so Friendly Staff
(f) Very rigid in Loan Disbursement
(g) No response to mail queries or complaints
2. SBI Bank: I am sorry to day but from the body language of staff it seems that SBI is simply not keen to process home loans. It is visible from their approach towards the customer. Being a PSU bank, it’s an extra work loan for the bank employees. I called their Home Loan Manager of MG Road Branch in Bangalore through reference but he never sent any details despite numerous calling. As the trust factor is very high and my father was insisting on availing home loan from SBI. I collected a list of documents required by the bank from my friend and visited Marathalli Branch. The Loan Manager of the branch was amazed to see the complete set of documents in the first visit itself.
The loan manager shared mob no of a Lawyer who is on a panel of SBI for legal verification of property. Her office was in Malleshwaram (It is around 20 km from Marathalli). I called Lawyer and fixed an appointment for next day and i took a day’s off from office and visited her office. After reaching her office, she told that she is busy today and i should come next day. Next day again i took off from office and visited then she told that she is in the middle of some imp case discussion. She told me to come next day. At this point, i decided that enough is enough and i dropped an idea of an availing loan from SBI else i would have been searching for a new job along with home loan provider. My worst pre home loan interaction was with SBI. Despite all these hassles, borrowers still prefer SBI Home Loan. I shared the reasons in my dedicated post, Why do borrowers prefer SBI Home Loan?
Pros:
(a) Public Trust as it is a PSU Bank.
(b) Offer one of the lowest interest rates due to the availability of cheap funds. In other words, you will always find SBI home loan interest rates cheapest among all.
There are no other visible advantages
Cons:
(a) The biggest disadvantage is you need to do a lot of running around. Availing a loan from SBI is a very painful task. You should have a lot of free time.
(b) The loan amount is approved on the registration value. In my opinion, the direct fallout is that borrower cannot save on stamp duty and registration charges. Therefore, the borrower has to register on total consideration value.
(c) Loads of unnecessary documentation.
(d) Loan Account can be operated only from Home Branch.
(e) Lack of Professional Approach.
(f) I receive max queries on original property documents lost by SBI.
3. ICICI Bank: ICICI is struggling with perception problem that they levy unnecessary charges and Home Loan is costliest among all the home loan providers. Secondly, not many people are aware that ICICI Home loan is processed from ICICI Bank and ICICI HFC separately. On many occasions, the borrowers were under the impression of an availing loan from ICICI Bank. In reality, it was from ICICI HFC. Though the staff was proactive but were not able to answer the queries during pre home loan interaction.
Pros:
(a) Dedicated Team and branches for Home Loan Servicing
(b) Largest Branch Network
Cons:
(a) Negative People Perception and bad word of mouth
(b) Staff does not have proper information on Loan Products
(c) Focus more on Higher Loan Amounts
My pre home loan interaction was ok with ICICI Bank.
4. AXIS Bank: I approached their Call center and someone called me after 7 days. The pre home loan interaction ended prematurely. Still i thought of exploring this option before finalizing. DSA promised me that he will send details through the mail but i have not received any mail till date. After that i approached Home Lone desk at Marathalli Branch and executive was not able to answer even basic queries on Home Loan. The second dampener of pre home loan interaction. She took my mobile no. & assured me that her boss will call to clarify all the queries. After few days, i received a call from her boss and again he was clueless on most of the queries. Same day someone called from their main office in Bangalore and he was also not able to answer my queries. Based on my pre home loan interaction i decided to drop Axis Bank from the list.
Pros:
(a) Lowest Processing Fees of just Rs 5000
(b) Recently they launched dedicated loan centers in select centers. When i availed home loan it was processed through bank branch only.
Cons:
(a) Staff does not have proper information on Loan Products
(b) No dedicated set up for Home Loan
(c) Interest rates on the slightly higher side compared SBI, ICICI Bank, and HDFC Ltd.
5. LICHFL: Similar to HDFC there is a confusion among borrowers that home loan LIC means a home loan from LIC India i.e. insurance provider. The fact is that loan is processed by LICHFL. It is only promoted by LIC India. LICHFL is a listed company. I approached LICHFL office on Varthur Main Road and i found the staff to be good and very knowledgeable. LICHFL does not offer floating interest rates to new borrowers.
The rate of interest is fixed for the initial period. The real shocker comes when it shifts from fixed to floating. When i approached them, at that time Rate of Interest was 10.5% and LICHFL was offering an interest rate of 9.85% for first 3 months. Currently, the interest rate is fixed for two years. In fact after few days of visiting their office, i got a follow-up call. The only reason why i decided against LICHFL was higher interest rate when the loan is shifted from fixed to floating. Secondly, LICHFL does not have a strong legal check in place (Based on feedback received from my friends). Though pre home loan interaction was good but i was not comfortable with interest rate movement. It was more of a trap.
Pros:
(a) LIC backed HFC
(b) Knowledgeable staff
(c) Faster Processing
Cons:
(a) Younger member in Home Loan Providers
(b) Don’t mislead by the lower interest for the initial period. Interest rate increased by approx 1.5% to 2% when loan shifts from fixed to floating. LICHFL was not willing to declare the applicable spread when the loan shifts from fixed to floating.
Conclusion: In short none of the home loan provider is a clear winner based on pre home loan interaction. You can finalize based on your personal requirement & preferences. if you want to borrow from experienced lenders then it’s better to go with HDFC or ICICI, that has its own advantages. In case, someone would like to go ahead with Govt backed lenders then SBI and LIC are the two options available.
None of the home loan providers is perfect in their approach and it is more to do with employees you are interacting with. The pre home loan interaction may vary even between 2 different branches of same home loan provider in the same area.
Copyright © Nitin Bhatia. All Rights Reserved.
Sir, I wanted to know the difference between Axis Bank’s (loan agreement) versus LICHFL’s (credit facility agreement). Are they same? Is there a catch somewhere? During buying or selling process, is there an advantage of one over the other method?
For a Flat on khata B Property,whether banks are easily providing loans
Dear Aman,
You can easily get loans for flat with Khata B. Only thing is Bank will take one declaration from you mentioning “Currently the Khata A is not available for the property you are buying and as & when u will receive the same, you will submit the original Khata A with Bank”
All the Best
Nitin Bhatia
Hi Nitin,
Which bank is giving such option? I mean loan for B khata house construction?
Hi, Banks or HFC’s are providing loan for Flats with Khata B but not for Revenue Sites i.e. for house construction.
Hi, Credit Facility agreement is different from Home Loan agreement…Just to give e.g. Availing Credit facility is as good as opting for personal loan means bank is extending a credit/facility for general purpose. If i am availing credit it shud not be necessarily for Home purchase, i can use for general purpose like marriage etc. The catch is rate of interest on credit facility will be high & secondly u will not get tax benefits under Home Loan if it is not mentioned in Loan agreement that loan is provided for Home Purchase purpose only i.e. its a Home Loan Agreement…Home Loans can be used only for Home Purchase, u can’t pull out single rupee for any other purpose…I request u to speak to LIC home finance agent and clarify the same before signing agreement…LIC Home Loans are known as Griha Vikas, Griha Shobha, Griha Prakash…If u can let me know which loan u r availing then i can share more details..Also compare Processing fees, Interest rates and Pre-Closure charges before finalizing between two.
Thank you. I had another question – LICHFL has been rather aggressive vis-a-vis Axis and that to me is a complete surprise! LICHFL has a plan ‘Freedom Floating’ at 11.65% which includes a spread of 2.75%. They have been pushing this plan compared to pure floating plan of 10.40% as the Freedom Floating has a ‘better spread’. Also, LICHFL says that as it is a Government company, their operating expenses are much lower than private banks.
Axis on the other hand had said 10.75% but today called to say that they can offer 10.85%.
The loan requirement is 1.50 Cr for 15 years.
What is your recommendation? Should I go for LICHFL and if yes, is a pure 10.40% better than ‘higher spread’ of ‘Freedom Floating’ 11.65%?
Thanks again.
Just to clarify LICHFL is not a Govt Company, it is promoted by LIC which is Govt. Company so holding of any Govt Company doesn’t mean it is Govt Company but yes backing of Govt Company is big boost
Secondly, my suggestion is don’t go by current spread being offered becoz tomorrow if LIC will increase RPLR or BPLR by 50 basis point then automatically ur interest rate will increase by 0.50%.
As i mentioned in my another article, it is advisable to avail Loan from banks rather than HFC’s (Housing Finance Companies)…Axis, SBI and ICICI are banks directly governed by RBI and their Base rate is directly linked to RBI’s Monetary policy so when RBI will reduce rates, banks are forced to reduce their rates but in case of HFC’s they are free to set their RPLR and BPLR depending on cost of Fund raising…When RBI will reduce rate they are not obliged to reduce rate..
Also i would like to clarify that Cost of Funds for HFC is high bcoz they raise fund on their own…U can check the deposits scheme available on LIC HFL site whereas banks have access to cheap funds becoz of CASA (Current Account Savings Account)..
Lastly the discounted rates of LIC are applicable only for 3-6 months..Kindly cross check on this part…Since ur loan amount is big, u can negotiate with Axis or any other bank on lower interest and processing fees.
My suggestion to u, u can ask both LIC and Axis bank to provide movement of following
1. Axis: For last 3 years monthly movement of Base Rate and Mark up on that
2. LIC: For last 3 years monthly movement of RPLR or BPLR and Spread on on that
These charts will help u in decision making as u can find out which institution is more transparent in fixing interest rates for existing customer..As home loan is long term commitment so it imp to know how these ppl treat existing customers.
Hi Nitin,
It is very good article on loan. Please help on my case. I have loan requirement of 24 Lacs. HDFC promised me to issue some amount as a repair renovation (finishing loan amount). Initially i was thinking of taking loan from LIC but now due to higher interest rate i have dropped this option.
HDFC offering me loan on interest rate 10.50 however there are few negative points –
1 > Grace period of only 5 days.
2 > Minimum requirement of prepayment amount – Minimum prepayment amount should be double the EMI amount. It means if my EMI is 24000 /- then i need to pay 72000 /- (48000 – Prepayment + 24000 – EMI).
3 > they will be charging 18 % interest on the missed EMI amount.
4 > 2 % fees on the Outstanding amount in case of takeover.
5 > They will not allow to carry loan agreement with me. Need to sign loan agreement on the bank premises.
6 > They promised me to issue the repair renovation amount on the same interest amount.
Should i think on the option of Axis bank ?
——————————————————————————————————————-
Hi,
It seems they are lending you Home Improvement loan. Just to add HDFC is passing wrong info to you. You can prepay any amount anytime without any penalty. The interest rate is 10.75% for less than 30 lacs. if u are constructing your own house then HDFC is right that u need to pay 2% for loan closure. Pls cross check & cross verify the same. Interest rate vary for different customers.
Secondly u have every right to take photocopy of agreement with u.
Thirdly on missed EMI interest rate is very high so its OK and they are right, interest for missed EMI is 18%
Lastly i cud not understand what do u mean by grace period, pls explain.
Thanks
Nitin Bhatia
Hi Nitin
Which bank i should go for 30 Lakh home loan ? ICICI or Axis ?
Out of 2, i will recommend Axis
I doubt you will get Home Loan without Khata in place but u can check with Axis Bank or HDFC. if they refuse then you may check with Saraswat cooperative bank / Federal Bank / Tata Housing Finance.
Hello Mr Nitin,
I’m planning to take 20Lakh loan from Bank for buying a fully constructed individual house. Which bank I should approach to get a hassle free repayment and faster loan processing. Also please suggest me whether to go for BANKs or HFCs. Even if I approach HDFC Bank Ltd, they will be able to process my loan or they will redirect me to HDFC Ltd?
Hi,
Unfortunately Home Loan process is but tedious in India. It may take between 10-14 days for loan processing. For repayment, you may opt for ECS facility..Its available with all banks and HFC’s
I will recommend Banks over HFC’s. HDFC Bank Ltd will redirect you to HDFC Ltd only.
hello Mr nitin…
I m planning to take loan from bank ICICI or AXIS..i got senction letter from both the banks.
ICICI bank offers me 1% cash back scheem.. first 1% cash back will be only after 3 yrs or EMI payment..then after every year end (first cash back will get after 3 yrs EMI)
AXIS bank offers me 1 yr EMI free (If i pay 15 yrs non stop EMI’s) (Cant close my loan before 15yrs and cant reduce my EMI amt and Cant move with Fixed rate)
Interest Rate is 10.25% 25lakh for 20 yrs for both the banks
if i take loan from ICICI say for fixed 2 yrs
and i can renew it before end of 2 yrs then in that case can they
impose more interest rate apart from available fixed rate in market?need ur helpsoniya
I have heard that ICICI will be good with for 1-2 yrs and then they will start imposing more charges and interest.
Axis has normal offer but has to be with axis bank for next 15 yrs.with same EMI sanctioned.
Nitin Ji, Plz reply
Ashish
Dear Friends,
Both ICICI and Axis have own pros and cons. Just to add that ICICI bank does not give Home Loan there is a separate HFC called ICICI Home Finance similar to HDFC which process Home Loan.
ICICI has very poor reputation in market in terms of being unfair to customers whereas Axis is quite decent. ICICI is front loading the benefits whereas Axis is rewarding towards the end. Not only for ICICI but for all HFC including HDFC, interest rates will be higher then normal after 3-4 years becoz of tweaking in Spread or discount over RPLR/BPLR. Its better to go with banks
Though both the schemes look attractive but actual benefits are not much & are only to the tune of maximum 0.5% in interest rate for both ICICI and Axis. These schemes are just to lure the customer without much financial benefit to customer.
If u have to select from either of 2 then considering average loan tenure is just 5-6 years then it is better to go with scheme which is passing benefits towards the beginning of loan i.e. ICICI. Also i request you to check with ICICI, the discount/spread being offered over RPLR/BPLR and will this discount/spread remain fixed during loan tenure.
On personal front i will not opt for either of scheme, rather i will prefer SBI becoz SBI is offering loan @ 10% interest (25 Lacs for 20 years)
Hope i answered your query
Thanks & BRNitin Bhatia
Hi Nitin,
Currently i am planning to take loan of 16 lakhs. I have shortlisted ICICI and AXIS. ICICI base rate is 9.75 % with markup of .50% and AXIS base rate is 10% with markup of .25%. In your above comment you said ICICI follow BPLR system like other HFC do. But that doesn’t seems to be the case as its offering base rate system which will get affected when RBI will change rate. So i am confused a bit. Can you please clear what ICICI actually follow and which one to prefer on the basis of base rate and markup.
It seems you are availing loan from some bank acquired by ICICI. ICICI process home loan through its HFC arm i.e. ICICI HFC. I will recommend Axis Bank.
Yes they said its ICICI HFC which will process my loan. And that’s where i am confused. If its HFC then in their website why its written i-base rate 9.75%.
What was attracting me to ICICI is that they agreed to reduce processing fee to Rs 5000 but Axis will charge Rs 8000.
Also since i am planning to end my loan in 10 years therefore i won’t be able to take profit of Lat 12 EMI waiver plan but will be able to avail profit of ICICI 1% cashback scheme.
Do you still think i should prefer AXIS.
Obviously i dont want to get into BPLR system but if ICICI is following base rate then ICICI suits me more i guess. Is there any way to find the actual truth behind this ICICI HFC base rate thing ?
I have replied on ur mail
Hi Nitin
I had taken HDFC Home Loan Floating Interest for Rs.15lacs last month. They say there is no pre=payment charges.
But they say there is a new rule from Dec’2012 becuase of which i have to pay additional fee of Rs.5000/- and stamp duty of 0.5% of loan amount again before first disbursement of loan.
My loan was sanctioned last month and i had already paid 0.5% processing fee + service tax.
Is it true??
There is no such rule but they may charge 0.1% of Loan Amount to register Mortgage document i.e. 1500 Rs…Besides this there is no other fees.
Hi Nitin,
Thanks for your wonderful advices, the blogs are really helpful for the people like me who are going for their first home loan.
I am purchasing a property in Bangalore which is approved by SBI, ICICI and Blue Homes. I always wanted to avail the home loan for my first house from SBI..but due to time constraints and personal reasons i have to change my mind, hence i am now planning to go via ICICI.
I am located in Chennai and am going for a joint home loan along with my wife who is travelling to onsite on 1st March for 6 months. Since she will be unavailable for the next 6 months in India, i want to loan to be processed at a faster rate. Later on after 1 year my plan is to switch over the loan account to Central Bank of India.
Kindly suggest if the option selected by me is correct or not. Also i would like to know the minimum tenure for switching over the loan account from one bank to another.
Regards,
Pankaj
If its floating home loan then you can switch your home loan without any pre-closure fees. There is no minimum tenure to switch home loan. You can switch your home loan any time.
Based on your requirement, your approach is right but i will recommend you to switch to SBI rather CBI.
Thanks Nitin :)
I initially wanted to go for a fixed-floating option, in which the home loan will remain fixed for 1 yr and will become floating after 1 year. Once it becomes floating there will be no prepayment charges etc as per the guidelines for floating home loans.
Let me know if this is a good approach, opted for this as i will get 1 yr time without increase in home loan interest rates for switching the account to another bank as per my preference.
Also, please let me know if you are aware of any pre-closure loan charges from ICICI or other banks.
Regards,
Pankaj
Interest rates are coming down. Availing Fixed interest loan even for 1 year is not a good approach. You shud opt for floating home loan.
There is no pre-payment charge in ICICI or any other bank on floating home loans.
Hi nitin ji,
I have booked a flat in noida extension, but as u known Shi is not funding the loan, therefore I approached to lichfl and got sanction 22 lakh @10.25 fix for 2 years then floting, but they are not disbursing for my project right now. In my project at present axis, and Hdfc are financing , kindly suggest me out of these two banks which which bank should I choose or I must wait till the lichfl start funding
HI Ajay,
Without any doubt you should opt for AXIS.
Axis follow base rate system while HDFC follow BPLR system.
Which means in future when RBI will be reducing rate, AXIS is definitely going its rates further but HDFC is not bound to do so.
Also do not go for fixed at the moment as home loan rates are going to decrease in coming days.
Between Axis and HDFC, i recommend Axis bank. Secondly as ur loan is already sanctioned so LIC must have posted Home Loan query in ur CIBIL database. kindly inform the same to Axis Bank in advance so that you don’t face any issue in loan approval.
Hi Nitin, thanks in advance for all your help in taking wise decissions. I am planning to go for a home loan of 35L. At present HDFC is offering 10.4% (16.65% base – 6.25% margin)with processing fee INR 11,250. I work in a reputed MNC which had tie up with ICICI and so ICICI is offering 10.15% (9.75% base + 0.4% fixed margin) with processing fee INR 3371. Which one should I opt? what is this base or BPLR?
Don’t ever go for bplr…if you will search you will get to know that when Reserve Bank will reduce its rate then HDFC is not bound to reduce it’s rate as it follow BPLR system whereas ICICI since follow base rate system is bound to reduce its rate. Better SBI Max gain but if you want to select between ICICI and HDFC. Then it should be ICICI.
I agree
Hi Sagar,
You may go for ICICI out of 2 lenders shortlisted by u. To understand difference between Base Rate and BPLR, you may check my following post on same
https://www.nitinbhatia.in/home-loan/floating-home-loan-bplr-vs-base-rate/
Thanks & BR
Nitin
hai…
i want to change my housing loan from LICHFL to HDFC…kindly explain the procedure for this.. also any preclosure charges applicable or not ? mine is floating interest for 20 years period…loan amount 23 lacs…
Pre-closure charges will be applicable as sourcing is not from own funds…You take letter from LIC mentioning all original documents submitted by you with LIC and the approach HDFC, they will guide you on further transfer process.
Hi Nitin !
First THANKS for the service to home buyers thru ur blog.
I
have first joined an MNC 10 months back as Software Engineer and have
Annual Income of Rs 5.4L. After next three months it may increase by 1L
and subsequent years also. I have not taken any earlier loans and not
married and no earning parents.
I have got an opportunity to buy a
independent house under construction for a low cost of around 32L (Low
Cost for me bcoz completing construction may take 7L or so as a lot is
constructed and buyers is moving to states).
I don’t want to loose this opp. but i have NO SAVINGS with me.
My salary account is in HDFC and i have account from by college days in SBI.
I know a guy in LIC but i don’t have LIC account.
I want to get an amount of 40L if possible to buy house any finish the work and pay using the rent and my salary.
Otherwise atleast 32L to not loose opp. In either case i need 100% Loan.
Is there any possibility to avail such 100% loan ? Can u suggest me some ideas and some banks ?
Thanks,
Arun
To be honest, its not possible..You can get only 80% of sale value as Home Loan…Another option is to avail personal loan but interest rate will be very high. secondly, just be cautious that your total EMI’s should not exceed 45% of your take home salary else your loan eligibility will reduce.
Is axis bank providing loan amount for B khata people in banglore if yes pls reply me with few deatils .
Yes, All banks and HFC provide loan for B Khata properties in bangalore.
What is MODT charge that the lender ( Bank giving home loan) charges while registration of property?
Please help me unedrstand
Memorandum of Deposit of Title Deed is an undertaking by the borrower that he has deposited the title documents with the bank with his own wish and will, in order to secure the financing obtained from the bank. Govt levy stamp duty on this document to register the same…Charges vary from state to state
Even SBI asks for 0.1% loan amount as MOD
yes..all banks ask
Does anyone have format / copy of MOD which is 0.1% of loan amount? Pls share.
Pls check following link
http://www.southindianbank.com/UserFiles/Forms/Memorandum%20of%20DepositofTitle%20Deds.pdf
Pls go ahead and shift to ICICI Bank…Also check whether loan is provided by ICICI bank of ICICI HFC. If ICICI bank then go ahead….The bad reviews are of ICICI HFC not of ICICI Bank
Hi Nitin,
First of all tks for a deep insight on the subject! kudos to ur efforts!
Now, i need your expert opinion on my issue, which is, i have an existing loan against plot from HDFC Ltd., and i need further construction loan on the same. Now, HDFC have certain issues on funding of the same; i am approaching to other banks for const. loan. But as per the requirement from other banks, i need to transfer my existing loan from HDFC to their bank. so, when i enquired about pre closure of my existing HDFC Loan, HDFC asks me it will attract 2% fore closure charges.
Here, i need your help.
is this foreclosure charges being levied by all the banks? and what is the %?
is there any way out, to waive off these fore closure charges? any escalation authority – govt./ HDFC?
any other idea, that you may pl. suggest.
tks
Hi,
There is no Prepayment Charges For Home Loans, Home Improvement Loans, Home Extension Loans, Short Term Bridging Loans, Plot Loans & Rural Housing Finance.
But there is a catch in Plot Loans, For Plot Loans, no prepayment charges are payable if the prepayment is made within 3 years from the date of first disbursement of the loan.
The prepayments made after 3 years from the date of first disbursement shall bear a prepayment charge of 2% of the amounts being so prepaid if the house is not constructed.
As i understand you are prepaying after 3 years from the date of disbursement & house is still not constructed thus HDFC is demanding prepayment charge of 2%.
If this is the case then no other way to get this charges waived off. Also pls go through your loan agreement regarding the same. If the same is mentioned in your loan agreement then it legally binding to pay prepayment charges (In case of prepayment).
The foreclosure charges are almost standardized across all banks and HFC’s except few if’s & but’s.
Tks Nitin, for your insightful revert. i shall go through the contract as well, in case i can find out something which can help in this.
Hi Nitin,
Can I go for the bank loan process after singing the Sale agreement? My builder is forcing me to sing the agreement asap. Out of SBI,LIC and Axis Bank which bank shall i go for the home loan? I am looking for a loan aprroval of 40 lakhs but i might end up taking only 20 lakhs. Pre-Payment is certainly on my cards. What duration would be ideal?
-Sam
Yes, you can take loan after signing Sale Agreement but before property registration. I will suggest SBI. Any type of debt is not good for financial health. Loan should be closed asap.
Dear Nitin,
thanks for giving insight on Home loan pros and cons from various banks.
I had applied for Pre approved Home loan from ICICI last week, since I had outstanding on my Credit Card of 1.2 lacs they impose a condition, they will give me a sanction letter for pre approved loan but with condition that I need to clear my all credit card outstanding then only they will disburse the loan.
I didn’t agreed to their condition and said no to them and with drew my Application. I checked with nearest SBI branch and their branch manager said they do not pose any restriction of clearing Credit card dues before disbursement, So I am applying now for SBI Pre approved loan. I have never defaulted on CC payments, never settled any CC dues and always pay more money that minimum payment before time. Last time when I checked my CIBIL score it was 776.
Kindly let me will my last application with ICICI will lower my chances of getting Home loan approved by SBI. Do I stand chance of getting my home loan approved form SBI or any other bank??
CIBIL score of 776 is good and normally score of 750 or more is sufficient for availing loan.
If ICICI has hit your CIBIL score while processing your loan application then it might bring your score slightly down.
If you fit into the profile of bank satisfying all eligibility criterion then you will not face any problem. Only good CIBIL score cannot ensure loan approval. Besides CIBIL score, bank also check other factors like repayment ability, job / business stability, probability of default etc.
Dear Nitin,
I again received call today from ICICI bank saying they are now ready to give me home loan without condition of clearing credit card dues,but i had submitted my documents to SBI yesterday for pre approved home loan??
Can I accept ICICI offer now and also go ahead with SBI for pre approval, as I have not finalized property I can wait for SBI decision till next month.
I know if SBI also approves it, I will have to loose processing Fee for ICICI., but in the longer run I will benefit from SBI.
Kindly suggest your view in this regard.
Regards
Saurabh Joshi
Pls get your CIBIL report online, you will get it instantly by answering some questions related to your past credit history. In all probability ICICI has posted a Credit query in your CIBIL records. If yes, then pls withdraw application from SBI before they post query in CIBIL record.
If you cannot see any credit query from ICICI then you go ahead with SBI.
Dear Nitin,
I checked my CIBIL score online, it is still 776, but in enquiry section it shows total 5 Home loan enquiries from ICICI bank with dates from 11 SeP 2013 till 19 Sep 2013.
Should I say to ICICI to stop posting enquiries???
Will it put any affect on my Home loan application to SBI , where I have given documents??
Also let me know is there any difference between CIBIL report I see by purchasing online and the my CIBIL report lender like ICICI or SBI see when I apply for Home loan ??
You withdraw your application from SBI before they hit your CIBIL score and continue with ICICI
Secondly, pls write to ICICI seeking clarification why they hit your CIBIL database 5 times and tell them to delete the 4 records out of 5 Home Loan enquiry.
punjab and sind bank provides the housing loan at low rate of interest today.
— 10.25% upto 30lac margin 10%
— 10.50% 30lac to 75 lac margin 20%
— 10.75% above 75lac margin 30%
— no processing fees
— no advanced emi
Dear Sir,
I got Pre Approved Home loan for SBI of 28 lacs,I want to purchase an underconstruction property having basic price of 35 lacs, builder is only ready to give property papers of 28 lacs. SO according to that My Home loan that can be sanctioned 22.4 lacs only. So will SBI give me loan of 22.4 lacs only or it will give me loan considering the market rate of that property???
Regards
Saurabh
You will get loan upto 80% of declared property value i.e. 28 Lacs excluding stamp duty and registration.
Hi Nitin,
The pros and Cons are so true as I experienced some what same treatment from SBI, LICHFL and HDFC. The way LICHFL treated was very good and really eager to answer all my queries which is why I am feeling to go with them as against SBI has very poor customer interaction, least bothered to help and inform. HDFC representatives too are not eager to share details unless once forcefully keeps asking.
However I am still in a stage of conclusion with whom should I be going (LIC or HDFC) as the interest rate difference is only .50% and LICHFL offering 2 years fixed rate then floating. LICHFL has informed of MODT charges however HDFC havent and as per your comments below I see it is charged by all banks, right?
Also LICHDL gives 80% of registration value and HDFC 80% of Sale agreement. HDFC loan sanction is valid for an year and LICHFL’s is for 3 months only.
I would be availing a loan of about 17-18lakhs so kindly advise the best on current market’s scenario.
Thanks
Shweta
Between LICHFL & HDFC, i will suggest HDFC. HDFC will inform about MOD charges at later stages but will definitely charge the same.
Hi Nitin,
I am presently one of the customers of lic housing finance .i am planning to stop payments for 1 or 2 years . can you explain the procedure to do this one .
thanks in advance …
There is no provision as such. Home Loan Providers don’t agree for same. You can discuss with LIC HFC. As per my understanding, they might agree if you keep paying atleast interest component per month.
Dear Sir,
I am planning to purchase a flat in resale,
Owner got the possession 2 months back , still society has
been not formed
1.
Myself & my wife both are working
But I don’t have form 16 for last year, so nationalize banks are not ready to give me loan
Whether I can get the home loan from SBI,in case my wife is first applicant ( she has all documents in place) & me as co applicant
2.
What things, we need to do, if we both want to
take the income tax benefit using the home loan
Regards,
ag
1. Your wife can be Primary Applicant and you can become co-applicant
2. Property should be in joint name, if you both wish to avail tax benefits.
Thanks Nitinji,
but does, representing myself as co-applicant, will affect my home loan deal during my next property purchase as primary applicant ( in terms of interest rate on fees?)
No, it will not impact.
Hi Nitin,
My query is that i have a home loan with Corporation bank (just finished 2 years of fixed interest rate of 10.25% & now paying floating rate of 11.25%). Wanted to know from you can i switch to SBI home loan without paying any preclosure charges?
Also havent undestood the home loan funda yet? bcoz i have taken the loan for Rs 28,00,000/- two years back & today Corporation bank says that my Home loan outstanding is Rs 28,72,667/-?
If pre-payment is from own source then no pre-closure charges but in case its transfer to other bank then existing bank might levy 2% pre-closure charges
Seems something wrong in your case or you opted for very low EMI which was just serving interest component. Another possibility is default from your end in last 2 years. Pls get loan statement from bank with breakup of principal and interest component. It will help you understand why principal outstanding is higher then original loan amount.
Hi Nitin,
I’m looking for a home loan for 42 lakhs. Builder told that the project is approved by HDFC,AXIS and LIC. I’m not opting for SBI as I can not spend so much time running for loan approval and I did’t hear any good feedback for LIC.
1. So among HDFC and Axis which one will be better?
2. Is there any prepayment charges if payment source is 3rd party in case of HDFC or Axis bank? Read somewhere that there is no pre-payment charges from hdfc if payment is done via 3rd party. Is it correct?
3. Heard that HDFC will reduce the ROI whenever RBI reduces the interest rate however for Axis bank we need to give application to reduce the interest rate. Is it correct?
Appreciate your help on this.
Thanks,
Jennie
Just to clarify, HDFC Ltd provide Home Loans not HDFC Bank.
1. Axis Bank is better compared to HDFC Ltd
2. In case of HDFC there is prepayment penalty if funding is from 3rd party but in case of Axis Bank there are no pre-payment charges irrespective of source of funding (Only for floating Home Loans)
3. HDFC Ltd is not a bank thus not governed by RBI. HDFC Ltd comes under NHB. Here reduction in interest rate means reduction in spread/mark up. For both HDFC and Axis, you need to pay conversion fees to reduce spread or mark up. Any other change in ROI due to change in BPLR (HDFC) or Base Rate (Axis) is automatic, you need not to give any application regarding same.
Thanks a lot Nitin that helps a lot!
HI Nitin
this is really a good post I just found on NET!
Wanted to have your input on the spread in LIC Home loan scheme. I have received sanction letter from LIC for 10.1 fixed for 24 months & then floating. But it doesn’t mention anything regarding spread. It just mention current LHPLR as 14.5%. Is this a regular practice or will LIC commit this while entering loan agreement OR is it possible to get them commit in writing at this stage only.
Further any idea about MODT charges in Mumbai- is it 0.1 or .2%?
Thanks in advance for all your inputs and advise
Rgds
Abhishek
I hope you have read the comments of other readers about LICHFC on this blog. As i mentioned in my post also that LIC lure customers by offering lower interest rate initially. Assume your 2 year period is over, The spread offered by LICHFL is 2.5% on LHPLR so effectively your interest rate will be 14.5%-2.5% = 12% whereas others are offering @ 10.25% so LIC is charging 1.75% xtra. Even if you insist in writing, LIC will not offer spread of more then 2.5%. Its better to mention spread else you never know whats in store for you.
MODT charges is 0.1% of Loan Amount
keeping this in mind I have applied for loans with SBI & IDBI as well. However while reviewing the chain of agreements of this property, found 2nd sale agreement done in 1994 (out of chain of total 5 agreements till date ) not registered. However original docs with stamp duty is there. Rest all agreements are there & share certificate & OC is also there. Even if any bank sanctions home loan, wanted to ascertain what are the risks I would be running in this case. The lawyer says we can get one sided registration done in the future(closed as of now). Could you throw some light on this complexity?
1. One sided registration is stopped in many states like Maharashtra. Its illegal
2. You need either the seller or his power or attorney to execute the registration
3. Even if you find seller then also you cannot execute the registration You need both the parties of 2nd agreement to register Sale Deed
4. Registrar will charge penalty for delay in registration
5. If one sided registration is legal in your state then 1st put a ad in news paper mentioning if anyone has objection, claim or rights on said property, he/she can lodge a claim in 15 days else no claim will be considered in future.
Legally, you always carry a risk. Any of the legal heirs of seller in 2nd agreement can claim the property.
Moreover, if 2nd agreement is not registered then technically and legally all the future agreements stands NULL & VOID. It is necessary to register the sale deed in India or hold power of attorney before supreme court judgement.
My personal opinion is not to go ahead with this deal.
Hi Nitin,
I am planning to take a home loan from Standard charted bank, As I am not finding any other bank having the scheme similar to SBI MAXGAIN, where I can park the extra money on monthly basis or so . Please provide me your suggestion in choosing Standard charted Bank or any other bank you know which is similar to SBI maxgain? I am buying a resale property and time is constraint and so I am not planning to go for SBI. Also I am taking loan in the name of mine, wife & father. and some banks are not allowing to put the name of three persons.
Is there anyway that I can registered property in my father name without putting my father name as loaner ?
Thanks,
Amit
Hi,
As per my knowledge, only SBI & SCB are providing this facility.
Your father can be one of buyer without being a party to Home Loan but then it will be reduce your home loan eligibility i.e. if there are 3 buyers and each hold equal share. if you & your wife avail loan then property value will be considered as 66% for Home Loan.
Another option is to mention the share of each of purchaser in sale deed e.g. you and your wife can hold 40% share each and your father can hold 20% share. If you don’t mention share in sale deed then all 3 will be hold equal share i.e. 33.33% each.
Though it is your personal matter but considering Indian Succession Laws, i will not suggest you to include your father in Sale deed. Reason being as per Hindu Succession Act all the legal heirs of your father will be party to your father’s share in your property. It will be difficult to partition or dispose off the property. It may go into legal dispute in future.
Thanks Nitin for your reply. It is very helpful for me. Now, I can try a loan from SBI without putting my father as co-applicant and in sales deed I can divide the percentage among three of us.
Hello Sir,
I m taking home loan from IndiaBulls. is it ok?
I will not suggest Home Loan through HFC like India Bulls, LICHF etc. Pls go through my following post
https://www.nitinbhatia.in/home-loan/floating-home-loan-bplr-vs-base-rate/
Hello Sir,
I got loan scantion letter from ICICI of 17 lakhs and i have submitted all propery documents to bank…. My queries is, if they is some devation problem in flat or in apartment then i won’t get that property ???
Hi, I cud not understand your query as i understand your loan is sanctioned but if there is any deviation in your flat then your loan will not be sanctioned.
Just check, if you have occupancy certificate, if its there then no need to worry else there is a possibility of loan rejection as mentioned by you.
Nitin ji , as co applicant for home loan application, if my cibil is showing one overdue from bank, i am not eligible for co applicant.. kindly conform me .Thanks
A GUpta Mumbai
It depends on your CIBIL score. If it is below 750 then you might not get home loan.
Thank you Nitin ji..Does creditsudhaar, creditmantri like this firm are able to support me to enhance my cibil score in 6 month to 1 year time period, after i paid all my dues.
No, they cannot help. Only good credit practices can help to improve CIBIL score over a period of time. What they are going to advise you after charging, i have already listed common points for free on my site :) i.e. how to improve CIBIL Score.
If you need any personalized advise on your CIBIL Score from my end, you may fill following form
https://www.nitinbhatia.in/cibil-score/
Hi Nitin,
Requesting your advice on home loan / purchase of a resale flat.
Will the registration happens only on the government rate ? or can we register for more amount ?
I am planning for loan from SBI , will they consider only the government value or the sale deed value ?
Thank you,
You can register the property at full sale value i.e. amount you are paying to seller. Normally property is registered at government rate to save stamp duty as Govt rate is normally lower then Market Rate.
SBI will consider Sale Deed Value for Home Loan eligibility and they always prefer that buyer should register the property @ Sale Value instead of Govt Value. You can check my following post for more details
https://www.nitinbhatia.in/real-estate/how-to-save-stamp-duty-registration-charges/
Hi Nitin,
I ve booked a house with a builder in Bangalore and he has given me the documents. I wanted to go with LIC home loan as I have found an agent who does it as the time taken for loan approval is <20 days. However I want to do a background verification of the property documents form a lawyer although LIC does it( keeping in mind your comments that the verification is not thorough enough).
1. What might be the costs incurred for doing such a verification?
2. What is the projected amount if I ask a lawyer for a written verification letter?
3. How will the lawyer know the property built and the documents are pertaining to the same site, will he do a site visit and refer RTC or do a site survey?
4. The builder has also given me a verification document from a laywer. How can I trust or find out its truthfulness?
5. Do you know any such lawyer who can genuinely help me out. Can you please share me his/her contact information?
If you do not want to disclose any contact information publicly you can email me the contacts/details. My email id is : nischith.96@gmail.com. Thank in advance. Your reply is much awaited
1. Charges vary from lawyer to lawyer. Any decent property lawyer in Bangalore will charge between Rs 6000- Rs 8000 per case
2. For written verification, you need to pay Rs 2000 – Rs 3000 extra
3. Complete verification will be done based on documents. There will no physical verification
4. You can’t trust builders lawyer
5. To avoid conflict of interest, i don’t recommend specific lawyer. You may get some good lawyers in Mayo Hall. Check with your friends as it is advisable to hire through recommendation.
Hi Nitin,
I am buying a resale flat in Bangalore. during this transaction two documents are made by builder and seller.
1. Tripartite – between Seller, Builder and buyer (myself)
2. Assignment agreement – between Seller and buyer (myself)
Now in the second document which assignment agreement between buyer and seller , builder is not signing either as party or as a witness.
Also, the price at which I am buying is menetioned only in 2nd document mentioned above. 1st document contain the cost at which builder sold to first buyer
Now since in the 2nd document Builder is not signing as witness, So Axis Bank is not allowing to process the loan request, although my Loan amount is sanctioned by them.
other issue is that, builder and seller are saying that these document are correct and bank suppose to disburse the loan based on this.
Can you tell me know which bank I should approach in this case ?
Amit Kumar
In your case property is still not registered therefore Assignment agreement is must. Assignment agreement is transfer of rights in property from seller to buyer. It is most important document.
Axis Bank is right, since property is not registered therefore builder has to be party in all the documentation related to property including Assignment agreement before property registration. Builder should be party in Assignment Agreement not as a witness.
None of the banks will approve Home Loan in this situation, If some bank approve also than you will be putting your capital at risk. I will not suggest you to go ahead.
thanks for reply,
In the tripartite agreement(between seller builder and buyer) which is actually the assignment agreement , it is clearly mentioned that seller is assigning flat to buyer in presence of builder and builder will go to sub-registrar office for the registration, also builder is assigning writes to me. the only thing is not mentioned that at what cost I have brought flat from seller.
and in other document money transaction amount is mentioned in which only buyer and seller are present, and in this document builder is not signing as witness or party, because builder is not indulging with the money transaction that happen with buyer and seller
these both the documents are executing jointly.
these documents are prepared from reputed firm of India which is the seller in my case.
As i have not checked the content of your agreements therefore can’t comment on legal clauses mentioned in the agreement. I would suggest you to hire the local property lawyer who can help in this regard.
Thanks Nitin, i will going with ur suggestion. It will simplify my concern.
Although with the current documents PNB and ICICI are in agree to provide loan. Even deustch bank.
My Pleasure. All the Best :)
Hi, I want to sell my apartment. Can anyone tell me how to get my apartment pre-approved for loan by a bank? I saw in a reality fair a couple years back that the hdfc bank stall was offering re-sale flats that were already pre-approved by them. So if I can do the same the chances of getting it sold faster is high as the buyer will already known the papers/Title are clear.
Hi,
This facility is provided by HDFC RED and available only for properties financed by HDFC Ltd. If you have loan from HDFC Ltd & wish to sell your property during loan tenure than you may list the same at HDFC RED (HDFC Red is real estate listing portal of HDFC Ltd). If seller is found for such property by HDFC RED than loan is transferred from seller to buyer by HDFC Ltd thus it is sort of pre-approved property for sale. Pls check following link
http://www.hdfcred.com/resale/
Greeting,
I have seen in net about LICF review and there is is mentioned that after over of 2 years fixed period they are charging to customer 11.90%.
Is it possible that at same time the difference of interest rate between new borrower and exiting borrower are too much high ?
Please explain this behavior, Is it still safe to go with LICF..
Kindly share your suggestion/feedback regarding this.
Thanks.
Yes, its true. Reason is that fixed interest rate is under special scheme which is loosely referred as Teaser Loan. After 2 years when loan moves from Fixed to Floating than in Home Loan agreement the discount on LIC HFL BPLR/RPLR offered is such that interest rate jump to 11.90%.
You may check the feedback of readers on LIC HFL Home Loan. My personal opinion is to check with SBI, Bank of Baroda, Axis Bank or ICICI Bank
Reg interest rate for new and exiting borrower, you may check my following post
https://www.nitinbhatia.in/home-loan/why-higher-interest-rate-for-existing-home-loan-customers/
https://www.nitinbhatia.in/home-loan/step-motherly-treatment-to-existing-home-loan-customers/
Hi Nitin, currently we have a home Loan with LICHF, when we started they have offered a 20 years loan with floating 10.40%, now after 3 months, my loan rate of interest has been changed to 11.45%. Please suggest what needs to be done here as this rate of interest is too high. HDFC is providing the interest rate of 10.25% without any processing charges. Should I transfer my loan to HDFC, please suggest
Very common tactics to cheat customers. There is no provision in LIC HFL to reduce ROI by paying conversion fees. Pls check with SBI, Axis Bank, ICICI Bank or Bank of Baroda as their Interest rates are linked to Base Rate whereas HDFC Ltd interest is linked to BPLR / RPLR.
Hi Nitin,
Thanks for writing informative articles about home loan. i am looking for a flat which is under construction(expected to ready in 1.5 years). I thought of going with Citibank fas track Home-loan (similar to SBI Maxgain) as i thought the money required to pay at the time of possession (around 8L) and interior can be kept in that account till possession (also as reserved money in case of any emergency). Bank is charging 0.1% extra for the fast-track facility.
Is it advisable to go with this scheme. My loan amount will be 50L.
Hope you are aware that no interest will be paid for the amount kept in this Home Credit amount (Current Account) but it will be reduced from your principal outstanding. Now, there is a catch, which i am confident that Citibank would not have told you. You need to maintain a Threshold amount in your account and only the amount over and above this threshold amount will be reduced from the principal outstanding.
Pls check with Citibank, what will be Threshold amount to be maintained in your case in Home Credit Account. Normally it is 1 Lac Rs but it may vary from customer to customer.
Once you will share threshold amount and also on an average how much balance you will maintain in Home Credit account then we will be able to decide whether its beneficial for your or not.
Thanks Nithin
Citibank has already confirmed that the threshold amount for me will be 1 Lac. if today i deposit 1.5Lac , then 50K will be reduced from loan principal and i can withdraw 1 lack tomorrow and keep the current account balance as 0 and my with-drawable balance will be .50K. Since i can withdraw the threshold amount i presume i am not loosing interest(except 1 day when ever i want to park some amount) for the threshold amount. Since my salary is on 7th, i have to reserve EMI amount for next months payment. So 1 Lac threshold may not be a hindrance for depositing extra money into home credit.
Currently bank is ready to disburse up to 35L(will reach 50L in 1.5 years). In that case i will be able to park 14L in the home credit for 1.5 years. On procession i may need to take ~10Lac. After that i may be able to park additional ~2L into home credit every year.
I have done calculations…Its financially beneficial for you. In my opinion, you may go ahead with Citibank Fast Track option without second thought.
hi nithin, i have recently availed a home loan from LICHFL under bhagyalaxmi scheme for 30 L. i wasnt aware of your blog then, but after having read your blog which i quite informative i have understood i have made a mistake… should i switch my loan to hdfc or axis bank after the initial fixed interest period is over???kindly suggest
regards and thanks
Don’t worry, Enjoy the fixed interest period then you may shift to SBI or Axis Bank. Only catch is LIC has highest closure charges (Misc charges like document retrieval charges etc).
Hi Nitin,
Please advice me
I took home loan from LICHFL in feb 2011 with int rate of 9.15 , but after 3 months they started charging at a higher rate and my emi went up , LICHFL agent advised me to pay interest only for 1 year if you have not suffient funds, i followed his advice and for the next 1 year i only payed interest and no principal was deducted from my EMI , now the interest rates are at 12% and my emi is 25140 pm and my loan amount is 2300000 for 20 years,
I now want to shift to ICICI bank as hey are offerening at 10.25 .
Please advice whether i should transfer my loan account to icici to save money
outstanding loan would be 2000000
Regrds
Ruchir
In my personal opinion, you should transfer your Home Loan.
Hello,
I like SBI Bank. I want to go up to 75 lacks. But pre processing charges are too high.
15 K for pre-processing (incl advocate and valuation fee)
0.1% of loan amount as EM charges.
0.1% of loan amount for Registration of EM Charges.
property insurance 0.6% (not sure if this is mandatory).
Please advice.
Thanks, Pradeep
EM creation charge (Stamp Duty) and EM Registration charges i.e. 2* 0.1% of loan amount will be charged by all Home Loan Lenders.
Home Loan insurance is not mandatory.
Now we are left with 15k processing fees, this fees is also charged by all lenders…You may save few thousand Rupees i.e. some banks charge 10-12k and SBI charge 15k.
I will suggest to go ahead with SBI and don’t opt for Home Loan Insurance.
Hi,
I have got home loan from bank, my question is – it is manadatory to give remaining amount to builder in cheque ?? (Ex: 22 lakhs property value – Home loan is 15 lakhs and remaining 7 lakhs i need to pay in cheque or cash ??) ……. and also my question is Wheather bank people will verify the cheque, if i give a cheque which is not valid ??
It is advisable to pay through Cheque. If there is suspicion, Bank may ask for bank statement to validate your contribution in property transaction.
What are common criteria placed by bank in principal amount payment ? Can we pay principle amt any time when we had money ? and close the loan faster ? ( Principal amt pay Rule of Govt banks and private sector banks )
You can pre-pay any amount any time in floating home loan without any penalty. For home loan linked to Fixed interest rate bank may charge pre-payment penalty of 2% on amount paid. Also if loan is under some teaser scheme then banks put a limit on pre-payment amount i.e. you cannot pre-pay more than 25% of loan outstanding every year for 1st 3 years.
Please check your Home Loan Agreement regarding details on same.
Dear Sir,
I have pre approvved home loan for my property(Flat). Site is under construction and Bank has released only 15% of amount as per construction. Now I want to change my flat no (A 32 to B33) in same site. Builder already convinced for change. But my concern is – Is it possible? Is bank will ready for this change? Do they charge for same? What type of document banks will ask for if they ageed?
Thanks
VenuGopal
You need to redo the entire process again. Legally and technically both are different properties. Its like you are buying a new property and selling old one.
You need to check with the bank. In some cases bank and builder agree to do this change by signing another rectification agreement where it will be mentioned that by mistake flat no mentioned is wrong in the signed agreements provided the new flat is of same dimension and other specification remain same like BHK, layout etc. I will not suggest this route.
Hello Sir,
I am planning to go for Home Loan, the project is approved from CAN FIN homes subsidiary of Canara bank, but they are quoting as 10.95%, shall I go ahead with them or look from ICICI bank which is comparatively lower.
Thanks,
Joy
Firstly, i will not suggest you to go ahead with CanFin Homes Ltd as it is HFC. You may go ahead with ICICI Bank.
Hello Sir,
I needed a quick info. My situation is that, I want to buy a property in my mothers name, and I don’t want to be the join owner. I am applying for the loan as the main applicant from HDFC Bank. So, would it be possible to register the property in my mothers name, with me being the main applicant? If so, could I do that by making her the co-applicant? She is a housewife and has no income and is 62 years old. The reason I want the property to be registered in her name is, because, I would not be able to be in town to register the property etc. And I don’t want to give anyone the POA. Thanks in advamce for any info/suggestion that can be provided.
Regards,
Goutham
I will not recommend to buy property in your Mother’s name at first place. Regarding Home Loan, As your mother does not have any source of Income therfore you will not get Home Loan in this situation i.e. Your mother being owner of property and you are main applicant for Home Loan. Your mother being Co-applicant in Home Loan will not help as she does not have source of income.
If you are joint owner with your mother then you can get Home Loan.
Thank you for the response Sir.
hello Sir.
I am presently having my home loan from SBI on floating interest.The interest % is 11.7 which is more than any other bank.
I am planning to transfer my loan to any other bank like HDFC or IDBI.Can you pls guide whats the best process and which bank i shd proceed based on pros and cons. Thank You !
If only high interest rate is the reason for loan transfer then i will suggest that you 1st discuss with SBI regarding High Interest rate. They will reduce your Interest rate by charging conversion fees equivalent to 0.5%-1% of outstanding loan amount.
Home Loan transfer is a big hassle and should be avoided till its absolutely necessary. You need to pay all statutory charges again. Still you feel that you would like to transfer your Home Loan then do let me know, i will share the Home Loan transfer details with you.
thank you sir for your prompt reply.Yes i will calculate the statutory charges,if they are quite large its better then to discuss with the bank regarding lowering the interest rate.