SBI home loan - Analysis and features

Analysis

    Speed of Sanction - 7 working days
    Ease of documentation - Pre- Approved projects only.Less Documentation
    Balance Transfer Charges - (incase of refinance) 2%
    Part-payment Charges - Nil
    Switching Charges - (Fixed to Floating or vice-a-versa) 1.75%
    Loan to Value ratio - Upto 20 lakh-90%,Above 20 lakh-80%
    Customer Service -  Good
    Franking Charges - 0.2%

Features

• SBI home loan contains package of exclusive benefits.
• SBI offers lowest interest rates. Further, they charge interest on a daily reducing balance!!
• Low processing charges.
• No hidden costs or administrative charges.
• No prepayment penalties. Reduce your interest burden and optimally utilize your surplus funds by prepaying the loan.
• Over 12000 branches nationwide, you can get your Home Loan account parked at a branch nearest to your present or proposed residence.
• Actual loan amount will be determined taking into consideration factors such as applicant’s income and repaying capacity, age, assets and liabilities, cost of the proposed house/flat etc.
• Security:
  Equitable mortgage of the property.
  Other tangible security of adequate value like NSCs, Life Insurance policies etc., if the property cannot be mortgaged.

Documents Needed - Salaried Individual

• Application form with recent photograph
• Salary slip of last 3 months
• Latest Form 16
• Bank statement for last 6 months
• Processing fee check
• Proof of identity (any one): Passport Driving licence/photo credit card/Employee licence/Voter's ID/PAN card
• Proof of Residence (any one): Driving licence/Any utility bill/Govt. or authority bill
• Proof of age (any one) : Passport/Voter's ID/PAN card/' Birth certificate/life insurance policy or premium receipt
  Signature verification proof
• Repayment track record of existing loans/Loan closure letter

Documents Needed - Self Employed

• Application form with recent photograph
• Bank statement for last 6 months
• Processing fee check
• Proof of age (any one) : Passport/Voter's ID/PAN card/'Birth certificate/life insurance policy or premium receipt
• Proof of identity (any one): Passport Driving licence/photo credit card/Employee licence/Voter's ID/PAN card
• Proof of Residence (any one): Driving licence/Any utility bill/Govt. or authority bill
• P&L and balance Sheet for last 2 years certified/audited by CA
• Qualification proof of the highest professional degree
• Proof of existence
• Income Tax return/Computation of total income/Auditor's Report Balance sheet/Profit and loss account for last
  2 years certified by CA
• Repayment track record of existing loans/Loan closure letter
• Proof of office address
• Board Resolution in case of company

HDFC Bank Home Loan Analysis and Features

Analysis

Loan To Value Ratio –HDFC Home Loan can be applied for a maximum of 85% of the property value subject to credit discretion


Through its Home Improvement Loan scheme, it facilitates internal and external repairs and other structural improvements. HDFC finances up to 85% of the cost of renovation (100% for existing customers) subject to market value of the property.

Speed of Sanction
Subject to all documentary compliances loan sanction within 7 working days

Ease of documentation
Simplified credit and legal documentation 

Customer Service
Excellent

Features:

    Loans are available to individual to purchase or constructed houses.

    Anyone can apply for home loan individually or jointly

    Loan is available up to 80% of the cost of property based on repayment capacity of the customer

    Automated repayment of home loan by giving standing instructions or PDC’s

    Flexible repayment options are available

Eligibility:

    Minimum age to apply for home loan is 21 years, and maximum age at maturity is 60 years

    Minimum 2 years in employment and minimum of 1 year in current organization.

Charges:

    Late payment charges: 2% per month

    Cheque swapping charges & Cheque bounce charge : Rs 500/-each

    Duplicate statement charges: Rs 100 per page, Maximum Rs 300/-

    Issue of duplicate provisional interest certificate, balance certificate, amortization schedule charges Rs 300 each

    Prepayment charges: No prepayment is allowed in first 6 months, 6 months to 5 years it is 1.5% of original loan amount,for 5 to 10 years 0.75% of original loan amount & for >10 years there is no closure fee

Interest Rate:

    Loan is available at both floating rate & fixed rates
    Floating rates are linked to base rate & BPLR

Documentation:
 

Salaried Individuals

      Application form with recent photograph
      Latest salary slip and Form 16
      Bank statement for last 3 months
      Proof of Identity (any one): Passport/Driving license/Photo credit card/Employee license/Voter's ID/PAN card
      Proof of Residence (any one): Driving license/Any utility bill/Govt. or authority bill
    
For Self Employed Professionals / Self Employed Businessman
    Application form with photograph
    Identity and Residence Proof Identity and Residence Proof
    Education Qualifications Certificate (for professionals only)
    Last 3 years Income Tax returns, Profit /Loss account, Balance Sheet and computation of income
    Business profile (for non professionals only)
    Last 6 months bank statements ( personal and business accounts)
    Proof savings & investments
    Processing fee cheque

* NRI’s are required to submit copy of the passport, work permit, CDC (in case of sailors) and
visa in addition to the documents listed above.

    

Factors to consider before availing your home loan

The next time you decide on buying your property and the amount of loan you require, this article should help. Most customers just think of the interest rates while going for the home loan.

This is a prudent thing to do, however there are a multitude of other things which you should keep in mind as home loan is usually for a tenure of about 20 years. So these factors also mean a lot to your experience during the tenure of the loan.


For more information please reach out to our expert team at Nandanam Consultants

Different categories of home loan

•     Home purchase loan: It is one of the basic types of housing loan which is taken for buying the new house.
•     Bridge loan: Such kind of housing loan helps in financing the new home of the borrower when he is interested in selling the current house. It is mainly a short term loan which is given to the applicant for the period when he is interested in selling the old house and wants to buy the new house.
•     Home extension loan: It can be used for extending or expanding the current home, like, adding an extra room or bathroom, etc.
•     Home improvement loan: Such kind of loan is for doing renovation or repairing of the house which you have already purchased.
•     Home conversion loan: It is the loan wherein the borrower has already taken a home loan for financing his current house but is now interested in moving to some other home.

With the help of the home conversion loan, borrower can transfer the current loan to the new house which needs extra funds. With the help of the new loan, you can make the payment of the earlier loan & arrange sufficient funds for buying the new house.

Factors to consider for your home loan:

• Interest Rate
• Pre payment charges
• Balance Transfer Charges(incase of refinance)
• Part-payment Charges
• Switching Charges (Fixed to Floating or vice-a-versa)
• Loan to Value ratio
• Speed of Sanction
• Ease of documentation
• Simplified credit and legal documentation
• Customer Service
• Franking Charges 

What differentiates a good home loan lender-
A good lender is one who clearly discloses all terms and conditions, is responsive to your requirements and gives you a loan at easy rates. A home loan demands constant servicing for next 15-20 years, and therefore, interest rate should not be the only base of choosing the lender.

    Check credentials of the lender-  It should be remembered, that the Reserve Bank of India (RBI) has no control over what the loan provider will charge. Each lender has its own cost of funds and they accordingly decide the charge whatever it deems fit. So, you should compare what a lender is charging as interest rate to new customer and on loans which are already running with them for past 2-3 years. This will help you decide what would happen to you two years down the line.

    Negotiation- If you are earning good income and have a decent CIBIL score then you should try to negotiate for home loan rates from lender. You might get 0.25 to 0.75 percent rate lower than normal. It also involves doing negotiation for processing fee. Many lenders are charging 0.5 per cent- 1 per cent as upfront fee but if you will do negotiation then it can be lowered to 0.1 per cent.

    Stick to one lender- Never make a mistake of applying to 5-6 banks at a time as after the introduction of CIBIL, each new loan enquiry can lower your credit score by approximately 10 basis points. A low credit score can impair your power to demand an easy rate. So, you do your research or talk to our experts before discussing the final deal.

 Fixed or variable interest rate?- Interest rate varies from time to time and it is a good idea to do a proper analyzing of liability portfolio on the regular basis in order to get maximum benefit out of it. It means, if you are borrowing for a short period, i.e., for 2-5 years, then you should go for fixed rate, or else, you can choose the variable interest rate, in the hope that the interest rate will come down in the longer tenure.

    Right selection- Since loan is for the long-term, therefore, you should select that company which is offering other loan products also, like, personal loan, car loan, education loan, etc. If required, you will be able to get preferential interest rates on other products also on the basis of your track record with the lender.
This will also avoid running from one lender to other for your varied financing requirements.