Home Loan

Axis Bank Home Loan

8.35 - 8.75% p.a.

Fixed/Floating

Processing Fee
1

Loan Amount
₹ -
Tenure
1 - 10 Years

ICICI Bank Step Up Home Loan

8.35% - 12% p.a.

Fixed/Floating

Processing Fee
0.50

Loan Amount
₹ 3 Crores Max.
Tenure
1 - 20 Years

HDFC Home Loan

8.35% - 8.80% p.a.

Fixed/Floating

Processing Fee
0.50

Loan Amount
₹ -
Tenure
1 - 30 Years

SBI Flexipay Home Loan

8.35% - 8.55%

Fixed/Floating

Processing Fee
0.35

Loan Amount
₹ -
Tenure
1 - 30 Years

Allahabad Bank Aashiana Home Loan

Processing Fee
0

Loan Amount
₹ 5 Crores Max.
Tenure
1 - 30 Years

Andhra Bank Housing Loan

8.65% - 9.70% p.a.

Fixed/Floating

Processing Fee
0

Loan Amount
₹ -
Tenure
1 - 30 Years

Bajaj Finserv Home Loan for Salaried

Processing Fee
1

Loan Amount
₹ 10 Crores Max.
Tenure
1 - 25 Years

Bank of Baroda Home Loan

Processing Fee
0.25

Loan Amount
₹ 10 Crores Max.
Tenure
1 - 30 Years

BOI Star Home Loan

Processing Fee
2

Loan Amount
₹ 5 Crores Max.
Tenure
1 - 30 Years

Kotak Mahindra Bank Home Loan

8.60% - 8.65% p.a.

Fixed/Floating

Processing Fee
1.25

Loan Amount
₹ -
Tenure
1 - 20 Years

PNB Housing Loan For Public

Processing Fee
50000

Loan Amount
₹ Up to 1 Crore
Tenure
1 - 30 Years

HSBC Home Loan

Processing Fee
1

Tenure
1 - 25 Years

IndusInd Bank Home Loan

Processing Fee
2

Loan Amount
₹ -
Tenure
1 - 30 Years

Citibank Home Loan

8.60% - 9.80%

Floating/Semi-Fixed

Processing Fee
5000

Tenure
5 - 25 Years

YES Bank Home Loan

9.35% - 10.50% p.a.

Fixed/Floating

Processing Fee
0.50

Loan Amount
₹ -
Tenure
1 - 25 Years

IDBI Home Loan

8.35% - 10.35%

Fixed/Floating

Processing Fee

Tenure
1 - 30 Years

J&K Bank Home Loan

8.90% - 9.25%

Floating

Processing Fee
0.25

Loan Amount
₹ -
Tenure
-

Mahindra Finance Home Loan

-

Processing Fee

Loan Amount
₹ -
Tenure
-

Fullerton India Home Loan

13% - 24% p.a.

Fixed/Semi-Fixed/Floating

Processing Fee
3

Loan Amount
₹ -
Tenure
-

Tata Capital Home Loan

8.35% - 12.50%

Floating/Semi-Fixed

Processing Fee
0.50

Loan Amount
₹ 2 Lacs - 3 Crores
Tenure
1 - 20 Years

UBI Home Loan

8.50% - 12.65% p.a.

Fixed/Floating

Processing Fee
0

Loan Amount
₹ -
Tenure
1 - 30 Years

Canara Bank Housing Loan

Processing Fee
0.50

Loan Amount
₹ -
Tenure
1 - 30 Years

Capital First Home Loan

-

Processing Fee

Loan Amount
₹ Up to 5 Crores
Tenure
1 - 25 Years

Catholic Syrian Bank Housing Loan

Processing Fee
1

Loan Amount
₹ -
Tenure
1 - 20 Years

Cent Home Loan

Processing Fee
0.50

Loan Amount
₹ -
Tenure
1 - 30 Years

City Union Bank Swayam Graha

Processing Fee

Loan Amount
₹ Up to 25 Lacs
Tenure
1 - 15 Years

Corp Home Loan

Processing Fee
0.50

Loan Amount
₹ Up to 5 Crores
Tenure
1 - 30 Years

DBS Bank Home Loan

Processing Fee
1000

Loan Amount
₹ Up to 5 Crores
Tenure
1 - 20 Years

Dena Bank Niwas Housing Finance

8.55% - 11.75%

Floating

Processing Fee
0.50

Loan Amount
₹ Up to 2 Crores
Tenure
1 - 30 Years

Deutsche Bank Home Loan

10.50%

Floating

Processing Fee
3

Loan Amount
₹ Up to 15 Crores
Tenure
5 - 20 Years

Dhanlaxmi Bank Home Loan

Processing Fee
1

Loan Amount
₹ -
Tenure
3 - 20 Years

Federal Housing Loan

Processing Fee

Loan Amount
₹ Up to 15 Crores
Tenure
1 - 30 Years

UCO Bank Home Loan

8.55% - 8.80%

Floating

Processing Fee
0.5

Loan Amount
₹ Up to 7.50 Lacs
Tenure
1 - 30 Years

Standard Chartered Home Loan

8.55% - 8.70%

Floating

Processing Fee
0.50

Loan Amount
₹ Up to 10 Crores
Tenure
1 - 25 years

Synd Nivas Loan

8.65%

Floating

Processing Fee
500

Loan Amount
₹ -

SIB Home Loan

9%

Floating

Processing Fee
0.50

Loan Amount
₹ -

Maha Super Housing Loan

8.70% - 8.80%

Floating

Processing Fee
0

Loan Amount
₹ -

IOB Housing Loan - Subha Graha

Processing Fee
25000

Up to Rs. 25,000

Loan Amount
₹ -
Tenure
1 - 30 years

Reliance Home Loan

Processing Fee

Loan Amount
₹ -
Tenure
1 - 30 Years

OBC Housing Loan

8.45% - 8.95%

Floating

Processing Fee
0.50

Loan Amount
₹ Up to 15.00 Lacs
Tenure
1 - 30 Years

LVB Home Loan

9.55%

Floating

Processing Fee

Loan Amount
₹ -
Tenure
1 - 20 Years

Nainital Bank Apna Ashiana for Home

8.40% - 9.75%

Floating

Processing Fee

Loan Amount
₹ -
Tenure
-

United Housing Loan

8.55%

Floating

Processing Fee

Loan Amount
₹ Up to 75 Lacs
Tenure
1 - 30 Years

Punjab And Sind Bank Housing Loan

Processing Fee

Loan Amount
₹ Up to 20 Lacs
Tenure
1 - 20 Years

IB Home Loan

Processing Fee
0.23

Loan Amount
₹ Up to 10 Lacs
Tenure
1 - 10 Years

TMB Home Loan

9.40% - 10.25%

Floating

Processing Fee
0.50

Loan Amount
₹ Up to 5 Crores
Tenure
-

DHFL Home Loans

8.50% - 9.40%

Floating

Processing Fee
5000

Loan Amount
₹ 1 Lac - 5 Cr

Table of Contents

Step 1

Is homeownership right for you?

Step 2

Are you financially ready to own a house?

Step 3

Financing Your Home

Step 4

Select Your Dream Home

Step 5

Making the Offer and Closing the Deal

Aftermath of the Purchase

Maintaining your home and protecting your investment

STEP 1

Is Homeownership right for you?

Real Cost of Ownership

Down payment

The amount of money which you pay at the time of purchasing home but it is only a part of the total cost of your home.

Legal Charges

It's the right of a lender or the organization to take someone's property if the borrower doesn't pay back the money. Generally banks include this cost in a processing fee, but some lenders charge it separately.

Cost for Fund Disbursement

Cost for Fund Disbursement

Property taxes

Where you live also matters a lot in terms what you pay, in addition to your mortgage you will also have to pay property taxes. Based on the locality, area, construction, building, property size, the government charges tax on your property annually and the collected amount is used for public services sanitation, repairing roads.

Maintenance Cost

As the name suggests, maintenance cost includes expenditure arising from the maintenance of home such as water consumption, electricity etc.

Transfer Charges

Ownership transfer charges are the charges which the new owner needs to pay to the real owner, the charges varies from state to state.

Expenses on living in a owned house

Expenses on living in a owned house often ends up costing a lot more down the road, You have to pay electricity bill, water bill, charges for replacing the roof, furniture and flooring charges, Cleaning charges, wiring, cables, lights, phone, Gas, refrigerator, washing machine etc.

Charges on Home Loan

If you are planning to avail loan to buy your home, then you have to pay many other hidden charges such as application fee, processing fee, administrative fee, documentation fee etc

Insurance Cost

You will have to pay insurance cost as home insurance protects homeowners against any damage and losses. It provides insurance against any damage accrued by the home during disasters.

Charges for Routine Repair and Maintenance

You will have to pay a lot of routine charges for repairs and maintenance such as cleaning charges, charges for improving the asset etc.

Major Repairs such as Extension of house or Renovations

The process of renovating or making additions to existing home is quite costly. No matter it will give a new look to your home but you also have to pay a huge amount on these major repairs.

Are you ready to own a home?

  • Are you financially stable? Your financial stability depends upon how much you have saved and how well you are prepared for unexpected situations. Every month, you have to pay the mortgage, insurance, property taxes even though you have paid the charges of buying a home, you still have to pay a huge amount on these charges, the house will still take money out of your pocket.
  • Do you have skills for financial management and handling the big purchase? Money can't bring happiness all the times , it may be the root of evils if you don't have skills to plan, manage, control. If you want to make a big purchase you must have skills for financial management.
  • Are you aware of the total cost you would pay along with the responsibility? Buying a house could be the largest purchase you will ever make, before buying it, you must know about the charges. You will have to pay the interest, fees, real estates cost and many other charges along with the responsibilities of owning a home.
  • Can you devote time for regular maintenance? You can't do anything halfway, if you are planning to purchase a house you will have to devote your time for it's regular maintenance.

Renting vs. Ownership: Benefits & Drawbacks

Renting

Benefits: Drawbacks:
Minimal to Zero Maintenance Low Upfront Charges
Low Upfront Charges Agreement for renting
Freedom to move to other location anytime Not making your own asset
No worries about decreasing property value Permission from owner before making any changes to the property.
Availability of Cash for investments Not easily available if bachelor.
  Have to live up to the regulation of the owner, especially if it's not independent renting.
  May increase the cost of transportation if you're unable to find a property to the nearby location of your workplace.
  May not get vehicle parking facility
  Increase the expenses

Buying

Buying Benefits: Drawbacks:
Freedom to make changes to the property Risk of decrement in property value
Building your own life long asset Maintenance and Repair Cost
No expenses for living at the place Responsibility of ongoing cost if financed or re-financed
Possibility of rental income Monthly repayment may increase as per the lending rate provided by the RBI
Peace of mind
Being an owner, no need of any permission
Saving of money

STEP 2

Are you financially fit to own a house?

Calculation 1: How much is your current expenses?

Household Expenses

  • Groceries
  • Clothing
  • Utility Expenses
  • Child Care, if married
  • Regular Maintenance

Entertainment Expenses

  • Dining Out
  • Family Function / Events
  • Hobbies
  • Travel

Existing Debt Liabilities

  • Credit Cards
  • Car Loans
  • Personal Loan
  • Loan on already owned property
  • Regular Maintenance

Savings & Investment

  • Deposit in Bank
  • Life Insurance
  • Home Insurance

Calculation 2: How much you can spend on housing?

Analyse how much you can invest on your home including deciding the area of the property and location, cost of construction, labor charges, set-up cost for interior, documentation and insurance of the property.

Affordability Rule 1 –

Your monthly housing cost should not be more than 32% of your average gross monthly income. This percentage known as your gross debt-to-income or gross debt service (GDS) ratio.

Housing Costs includes –
  • Monthly payments of your home loan including both principal
  • Interest and property taxes.
Affordability Rule 2 –

Your monthly debt load should not be more than 40% of your average gross monthly income. This percentage is known as your total debt-to-income or total debt service (TDS) ratio.

Your monthly debt load usually includes –
  • housing costs as calculated by Affordability Rule 1
  • car loans or leases
  • credit card payments
  • line of credit payments
  • other home loan charges

The maximum cost you can spend on a home depends on these numbers and the size of your down payment. For first-time buyers, saving a down payment can be the hardest part of buying a home.

Calculation 3: How much you need to pay upfront?

  • Down Payment to the builder/owner
  • Charges payable to the lender (Processing charges, document charges and other additional charges)
  • Margin Money that you have to pay
  • Property Verification and Appraisal Charges
  • Charges for Insurance of the property
  • Charges for Loan Insurance, if any
  • Property registration charges
  • Legal Charges
  • Possible Repairs / Renovations
  • Moving cost
  • GST and Other Taxes

Calculation 4: Analyse if You're able to Meet the Expenses

Now you'll have all of the possible charges you may have to pay upfront in order to finance your house. Match them up with your monthly income and living expenses. If your monthly costs are over 32% and your debt load is more than 40% of your gross income, it will be difficult for your to avail the funds for home loan.

What's Next?

If you can afford the cost, then you can go ahead with the financing of your home. Otherwise, you need to cut down some additional expenses or wait for a period of time till you clear some of your existing repayments, if any as well as saving some money for the upfront costs. If possible arrange a meeting with your lender.

STEP 3

Financing Your Home

Check Pre-approved Offers / In-Principle Approvals or Special Schemes

If you're an existing customer of a bank/FI, then you can check the pre-approved offers the bank may have available for you. Not only it's an easy option than going and applying with multiple lenders, but also saves you from affecting your credit score because of hard-pull of your credit score data.

Just in case your existing bank doesn't have any pre-approved home loan offer for you, you can also check if they provide in-principal approval.

With Pre-Approved Offers or In-principle approval, you can get approved for the required amount for house without even finalising the property first. It helps you plan your finance better and sort the choices since you get the idea of how much you can spend on the house.

Apart from it, few banks and NBFCs offer special schemes depending upon the employment criteria such as Home Loan Schemes for Government Employees, Corporates, Teachers and IT Employees etc.

Mapping the basics of your home loan

When deciding a suitable lender for your home loan, you need to first get familiar with few terminology banks/FIs uses that will help you understand the difference between how much you're availing and how much you would have to pay.

  • Repayment Period – tenure offered by the bank to repay the loan amount with applicable interest and charges.
  • EMIs Repayment Options
    • Step Up EMIs – Gives you the option to pay the decreased EMIs in the starting of the loan, which increases after a certain period. Helps you lower the burden at the starting of the loan. Best suitable for salaried who are expecting growth in their monthly income.
    • Step Down EMIs – Gives you the option to pay the increased EMIs in the starting of the loan, which lowers after a predefined time span. Helps you lower the burden at the end of the loan tenure. Best suitable for Self-Employed applicants earning profit in business as well as Bachelors who are deciding to start a family in upcoming years.
    • Bullet EMIs – Gives you the flexibility to pay the principal amount of your loan along with your EMIs. Hence, you repay your loan faster as per the availability of additional funds with you. Best suitable for applicants who receives periodic incentives or bonus.
  • Interest rate
    • Fixed Interest Rate – an interest rate levied to you which stays same over the period. Usually higher than floating rates.
    • Floating Interest Rate – interest rate that changes depending upon the lending norms set by the government. Usually lower than fixed rate.
    • Semi-Fixed – interest rate that remains floating for a certain period of loan tenure and than switched to fixed.
  • Prepayment / Pre-closure – Gives you the option to pay your loan amount faster than the predefined loan tenure either by paying the full amount or by paying the multiple EMIs at once.
    • Foreclosure / Full Closure
    • Partial-Payment / Part Closure
  • Balance Transfer
  • Top Up
  • Penal Interest / Late Payment Charges
  • Credit Score

Decide Your Co-Applicant

Co-applicant is one of the necessary aspect when it comes to lending funds, especially in case of home loans where you avail a large sum of funds for a longer tenure. Having an employed co-applicant not makes your eligible for a large amount but also helps you in tax savings depending upon the contribution in the property. However, having a co-applicant is not necessary unless there are more than one owners of the property.

All of the co-owners of the property must be the co-applicants in the home loan. If you are the only owner of the property, then you should include your rightful heir to become the co-applicant. A co-applicant can be any close relative such as Spouse, Father, Mother, Son or daughter.

In case you don't have kids, then your spouse would become the co-applicant. If you have one or more than one kids (including a son), then bank/fI insists on making the son co-applicant. In case your only kid is a daughter or more than one daughter, then the unmarried daughter can become the co-applicant.

In case you want to make your brother a co-applicant in the loan, then he must be living at the same place with you where intent is to keep living in the joint family in future as well.

  • Exclusion of the co-applicant criteria
    • Married daughter cannot be the co-applicant
    • A brother cannot make his sister co-applicant in the loan, or vice-versa.
    • A sister cannot make her another sister a co-applicant in the loan.

If You're an NRI, then you must choose your a co-applicant who is a local resident in India and living in the city where the chosen bank/FI providing home loans service.

Documents necessary to apply for home loan

  • If Salaried
    • Employment History
    • Contact Information of Current Employer
    • KYC Details
      • ID Proof
      • Address Proof
      • Age Proof
      • Signature Proof
    • Bank Account Statements
    • Latest Salary Slip or Certificate
    • Proof of Education Qualification
    • Documents for any payments towards any ongoing debt.
    • Proof of Savings & Investments
    • Proof of deposit margin money
    • Documents for Co-applicant, if any
  • If Self-Employed
    • Certificate of Professional Qualification
    • Latest ITR with computation of income
    • Latest P&L Account along with all the schedules and balance sheet.
    • VAT or Service Tax returns or TDS Certificate
    • Bank account statement (Savings account, current account and Overdraft account).
  • If NRI
    • Bank Statement (Overseas as well as Domestic account, if any)
    • Latest Salary Slip or an Active International Account
    • Copies of Passport or Visa
    • Certificate for Salary
    • Employment / Appointment Letter
    • Power Of Attorney in favor of a Local Co-Applicant
    • Documents for Local Co-Applicant
  • Documents Required for the property
    • Allotment letter from builder
    • Advance money receipt
    • Documents for Transfer of ownership
    • Agreement of Sale
    • Registration and stamp duty receipt
    • Index- ii
    • NOC from builder
    • Own Contribution Receipt (OCR )
    • All builder linked documents (Applicable for cases which are not approved or previously not funded by the lender).
    • Development Agreement
    • Tripartite Agreement
    • Partnership Deed
    • NA order

Know Your Credit Score

Credit Score is an essential tool to decide how much you can borrow, giving a brief look of your financial stability at different points in time. Shows your seriousness towards your debts and bills.

Hence, better to know your credit score before going for loan application.

Insurance of the Property and Home Loan

  • Insuring the Property – When you insure your home against any crisis such fire, earthquake, flood etc. Not mandatory.
  • Insuring your Home Loan – You can protect your home loan by choosing any home loan protection and save your family from the burden of loan repayments in case of your death.

Things to Keep in Mind While Planning and Managing Your Home Loan

  • Avail only as per your need and affordability
  • Evaluate the impact of applicable interest rate on your monthly EMIs
  • Repay as fast as possible
  • Make sure your living expenses does not affect your monthly EMIs and result in payment defaults. Increase in market prices of the products you use over the time may eventually affect your monthly EMIs if you're short on budget or not getting hike in your income.

STEP 4

Select Your Dream Home

What do you need in your dream home?

Location

The location of the property affects the cost of owning the house most. You must have a good understanding of the locality including safety in the area, distance from your workplace or school of your kids, distance from market and public transportation.

Property Size

Check if you need space for vehicle, garden area etc.

Environment Friendly

Having a lifestyle that is better for your surrounding environment is all about taking a small step towards mother earth. So, decide if you want to invest in some environment friendly equipments such as Solar Panels. Government provide subsidy on utilizing these products, so it can be one good choice to go.

Lifestyle

You current lifestyle will affect your home loan the most, especially when you have kids.

Type of Home Ownership

Freehold

where the owner of the land has no time limit to his period of ownership, the owner enjoys complete ownership and can use the land for any purpose such as for selling, renovating, or transferring keeping the local regulations in mind.

Flat / Apartments

where you have exclusive ownership of the physical share of a building together with a legal share of common ownership of the immovable to which the ownership belongs.

Co-operative Housing

co-operative housing is a a association or corporation which owns a group of housing units and common areas for the use of all the residents.

Leasehold

It is a legal right to live in or use a building or piece for an agreed period of time.

Should you go for building your home, a previously owned home or purchase a newly built?

New Home

Whether the new house you are purchasing is built and ready to move in, will effect your expenses till the time you moved into the house. It affects a lot when you purchase a flat or apartment in a co-operative building. If the flat/apartment is currently undergoing construction, will result in expending money on rent till the flat/apartment is ready.

Previously Owned

Bad condition of the previously owned house will result in repair and renovation. Hence, you should also check if you can include the cost of renovation/repair in the home loan amount. If the bank/FI offers top-up loan then you can also avail the additional funds to repair the house after moving-in.

Build Your Home

Good choice since you build your house as per your requirements unlike purchasing a built or previously owned house.

Start Your Search

Search for the suitable property through different mediums such as –

Who should you contact before buying the home?

Real Estate Agent

Help you find the best suitable solution. However, will charge you bucks.

Broker

An individual who buys and sells goods or assets for others.brokers are usually a licenced professionals

Insurance Agent

He will explain you various policies, and helps the clients to choose plan which suits them.

Lawyer

He will prepare your home purchase documents perform a little search and close the deal.

Land Surveyor

A professional who verify the property in order to provide a land survey (or "certificate of location"). If the seller doesn't have a survey, or if it's more than five years old, the buyer will likely need to hire a surveyor before they can get a home loan. A real estate agent usually helps coordinate the survey with the seller.

Appraiser

He will help you to systematically determine the market value of the property.

Builder / Contractor

He is the person who will prepare your contract, he will provide you material, all necessary workers to construct the house.

Protect yourself against Home Loan Fraud

Home loan fraud happens when people intentionally show incorrect representation of their incomes and assets to get their loans approved quickly.

  • Never accept money, guarantee a loan or add your money to one's home loan without verifying the person. Make sure the person is trustworthy.
  • Get help only from the certified real estate agents who you can trust.
  • Get legal advice from your lawyer
  • Contact local housing authority and research the history of the chosen property.
  • Make every transaction documented and get the papreful proofs.

STEP 5

Making the Offer and Closing the Deal

Making the Offer

Make a legal offer to the previous owner, builder / co-operative society regarding the purchase you gonna make, so things can move towards your dream of owning a house.

  • Your offer should include
    • Your Legal Information, Name of the Seller and address of the property
    • Cost of Purchase / Construction
    • Upfront Amount
    • Date of the Possession of the property
    • Request for quick survey
    • Expiry date of the offer
    • Any other condition such as approval of funds

Get the Documents Ready and Funds Available

Make sure you have the necessary documents ready so you can get the funds on time and close the deal as soon as your offer is accepted by the current property owner. Make sure you cross check the date for the availability of the funds.

  • And make a list of things required for closing the deal such as –
    • Latest Property Tax Assessment
    • Documents for the estimated market value of the property
    • Property Verification Report
    • Estimation of any repair / renovation
    • Legal description of the property
    • Utility Charges
    • Signed Offer for final purchase

Close the Deal

Avail the funds from the bank/FI – Now, you can avail the funds from the bank or financial institution.

Pay the Upfront Cost – you have to pay the part of the money before you gets the property basically these are the expenses charged at the beginning of the contract.

Document the deal on Papers – you will have to collect all the papers according to the deal.

Aftermath of the Purchase

Maintenance of the property and protection

  • Make timely payments of your home loan
  • Operating cost for the home
  • Living up to the planned budget
  • Save for urgency

Keeping the House Safe & Secure

Make sure your house is safe and secure and you're ready for any emergency such as evacuation plan in case of fire, keeping the valuables safe, maintain safety measurements like Fire Extinguishers and Smoke Alarms.

Home Improvements

Home improvements might take place during the tenure of your home loan repayments. Hence, you should save some funds for the home improvements or you can simply avail a top-up loan on your existing loan from the bank/FI.