The documents – proof of ownership of the land, estimate of the construction cost by a certified architect, proof of income and repayment capacity – must be established.
Through Chaitali Dutta
IAre there prepayment penalties for the complementary home loan?
—Arvind Kumar Jain
No, there is no prepayment penalty on the Complementary Home Loan, provided there is no clause to the contrary in the letter of arrangement. Check the details in the loan sanction letter.
I have a floating family health insurance policy (me, wife and son). Son is now 25 years old and this year he enrolled as a full-time MBA student. Can I continue with the coverage for him?
– Haresh Saraiya
There is no industry standard here. Usually in a floating plan the child is covered until the age of 18/21/25. Your son must now opt for an individual plan.
Since my brother and I want to build a house, what documents will we need for the bank loan?
– Raghav Singh
Siblings can jointly apply for such a loan. The documents – proof of ownership of the land, estimate of the construction cost by a certified architect, proof of income and repayment capacity – must be established.
What is the procedure followed by a bank to assess the market price of an apartment and grant a loan accordingly?
For a new apartment, the banks do not opt for an independent appraisal. The loan is granted on the value of the sales agreement. For a second sale, where the buyer benefits from a mortgage, the bank requests a certificate of valuation of the property by an approved expert.
I have paid EMI for 15 years and now have the money. Do I have to repay the entire loan in three installments over a two-year period?
Ideally, we should reduce the liability as soon as possible if funds are available. A debt-free life reduces the pressure on the borrower. Having said that, a home loan is one of the best types of liability you can take on as it is a cheaper asset-backed loan and you can also get a tax advantage on the interest paid. After 15 years, your EMI has a greater portion of the principal repayment compared to previous years.
The author is the founder of AZUKE Personal Finance Advisory (www.azukefinance.com).
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