For what specific purposes can I use my home loan funds?
Below mentioned are all the purposes you can use your home loan funds for –
- Residential houses/flats to be constructed/ purchased by the individuals.
- Residential houses/flats to be constructed by public agencies like HUDCO, Housing Boards, Local Bodies, Co-operative Societies, Builders or Employers etc. for individuals.
- Note: In case of unfinished flats or houses, cost of completion/finishing of house/flats will be deemed as a part of total cost of the project.
- Residential house/flat to be constructed/purchased by a person who already owns a house in the town/village where he resides acquired by availing housing loan from any bank/FI or otherwise and intends to buy/construct a second house in the same or other town/village for the purpose of self-occupation.
- Residential house/flat to be constructed/purchased by a person who intends to purchase/construct a house and proposes to let it out on rental basis on because of his posting outside the headquarters or because he has been provided an accommodation by his employer.
- Residential house/flat to be purchased by a person who is currently residing as a tenant in that house / flat.
- For purchase of a plot only, provided a declaration is obtained from the borrower that he will build a house on the same plot, using bank finance or otherwise, within a period of 2 years. Advance is not authorized against plots purchased on power of attorney basis.
- Supplementary finance in the form of additional loan may be offered within the overall ceiling for carrying out alterations/ additions/repairs to the houses/flats that are previously financed.
- Finance intended for repairs & renovation of houses/flats already constructed with own resources or with housing loan whether liquidated or outstanding.
- Housing loan can be approved for purchase/construction of second house.
- Loan can be approved for acquiring third and subsequent house too but such loans shall not be approved as per this scheme and will be dealt as Exposure to Commercial Real Estate (CRE).
How J&K Bank will decide my eligibility for the home loan?
While approving your home loan application, the bank will take into consideration certain elements – income and repaying capacity, age, assets and liabilities, cost of the proposed house/flat to decide if you’re eligible for the proposed amount.
What can I do to enhance loan eligibility to avail a larger amount exceeding my credibility?
To enhance loan eligibility following options may be added –
- Income of spouse and/or children living with you, provided that They must have a constant flow income through salary and his/her salary account is maintained with a bank (preferably J&K Bank) OR They have been made a co-applicant i.e. a loan will be approved in joint names. OR They are the joint owners of the land/flat/house (optional for spouse). OR Only residual income of spouse / son / daughter i.e. income net of all deductions comprising of deductions towards servicing of already availed loans (if any) to be considered. OR The income proof documents of spouse / child(ren) as applicable / stipulated under scheme shall be obtained to verify their income.
- Anticipated rent accruals (less taxes, cess, etc.) if the house/flat being purchased is proposed to be rented out.
- Depreciation, subject to some conditions.
- Regular income from all sources.
What is the maximum amount I can avail for home loan?
- For fresh construction/purchase of house/flat, cost of construction / House / Flat less by stipulated margin.
- For State/Central Govt Pensioners, loan amount up to 36 times of the net monthly pension or maximum Rs. 25 Lacs Maximum for carrying out repairs / renovations to the house / flat. In addition, no cap on maximum loan amount subject to the condition that the addition / alteration is done after obtaining valid permission from competent authority / Municipality (BOCA), for carrying out addition / alteration to house / flat which is not acquired by bank finance or where loan has been liquidated / adjusted.
- For purchase of land or plot, restricted to the extent of maximum Rs. 50 Lakh or 60% of the cost of plot of land whichever is less, provided the area of proposed land is not more than 5440 Sq ft or 1 Kanal.
- For borrowers who are looking to construct a house and have already availed a loan for the purchase of land/plot, credibility limit in such cases will be fixed after considering the cost of construction (of house / flat) less by the stipulated margin.
What is the applicable interest rate slab for home loan?
An interest rate of 8.90% will be applicable for the loans up to Rs. 1 Crore. An interest rate of 9.10% for the loans above Rs. 1 Crore to Rs. 3 Crores, and 9.25% for the loans above Rs. 3 Crores.
Is there any concession for female applicants?
Yes, a 50% waiver in the processing charges will be provided to the women borrowers (both for sole/joint borrower).
What are the charges applicable on Home loan balance transfer?
In case of balance transfer from other banks/FIs to J&K Bank,there will be no processing charges levied.
Do I need to provide any security or collateral for Home Loan?
Yes, you have to provide a security in order to be eligible for the home loan. Below mentioned are the requirements for primary security –
- Equitable/ Registered Mortgage of house property/flat to be constructed/ purchased (House property to include land underneath & appurtenant thereto in case independent house only).
- The title of the property must be clear, marketable and should be free from encumbrance.
- Where mortgage of house/flat cannot be created immediately and / or possession of house/flat is not given in situations like house/flat or under construction house/flat or to be constructed house/ flat is being purchased/ from the Housing Board/Co-operative Society / Development Authority / Construction Company/Builder and title/conveyance deed is executed in the favour of purchaser only after completion of full or partial construction after purchaser making full payment of the cost of house/flat, a tripartite agreement shall be executed amongst the Housing Board/ Development authority / Co-operative Society/ Construction Company/ Builder, the Borrower and the Bank wherein the Housing Board/ Development Authority / Co-operative Society/ Construction Company/ Builder undertakes that the title to house/ flat shall be transferred to the Borrower immediately on receipt of entire sale consideration and the Bank’s lien shall also be marked in their/ his records, thereafter to be followed by execution of mortgage deed in favour of the Bank once the project has been completed and Sale Deed (Deed of apartment/Conveyance Deed in case of Flats) has been executed. Charge to be registered in favour of the Bank with the concerned authorities. Besides tripartite agreement an affidavit cum undertaking from the Housing Board/ Development Authority / Co-operative Society/ Construction Company/ Builder to the effect that the construction shall be as per the sanctioned plan & building bye laws, to be obtained.
As far as the collateral security is concerned, no collateral security or third party guarantee is required in all cases except in case of the following –
- For Pensioners, guarantee of spouse / Legal Heir(s), who is / are entitled for family pension, is to be obtained.
- For NRIs, 3rd party guarantee of two resident Indians of sufficient means to cover the liability apart from the other securities shall be obtained.
- Loans upto Rs.2.50 lacs (Rs.5.00 lacs in case of employees of J & K State Govt) to be granted for the purpose of repairs/ additions/alterations /extension of existing houses, where the mortgage of the house property is not taken as security.