Home loan is generally taken either to buy flat/house, construction of house or renovation.
Eligibility generally depend on repayment capacity and property price
Generally builders sell projects under time linked plans (TLP), construction linked plan (CLP), subvention schemes. Most banks fund projects only under CLP. Some housing finance companies fund projects under TLP and subvention schemes as well
Home loans are usually sanctioned for maximum long tenure of 30 years.
It is observed that the average period people take to pay off their home mortgage fully is around 8 years.
As per RBI circulars, banks are not allowed to charge prepayment penalty or charges on floating rate home loans. However, banks may charge penalty on prepayment of fixed rate loans. Charges may vary from 1 % to up to 3% of the loan amount.
It is common knowledge that taking a home loan is the only way a person in his 30’s or early 40’s can afford his family a home.
When you take a home loan, you commit to paying almost EMI (Equated Monthly Installments) of as much as up to 60-65% of your monthly income for a period that can be as long as 30 years. So, you take a large and long term obligation. Hence, it is important that you make the right decision that doesn’t hurt you in future. This guide is targeted at helping
Hence, it is important that you make the right decision that doesn’t hurt you in future. This guide is targeted at helping you understand home loans better in simple language and draws upon the long experience of the MyLoanCare team in helping people with their loan requirements.