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Home loan

Vardan Singh Sengar (Accounts Manager in Private Company) (433 Points)

19 February 2014

MY QUESTION IS ON HOME LOAN PLS SUGGEST SOME GOOD ADVICE

A PERSON IS LIVING ON A RENT HAVING A MONTHLY INCOME OF 21000/- P.M (NET) & HE IS PAYING AT PRESENT MONTHLY RENT OF RS 6000/- P.M NOW HOW CAN HE PLAN TO BUY A NEW HOME ? & HOW MUCH THE FINANCIAL INSTITUTIONS MAKE FINANCE? WHAT TYPE OF FINANCIAL PLANNING A PERSON SHOULD DO IN ORDER TO BE ELIGIBLE FOR HOME LOAN??

NOTE :- THE TOTAL INCOME OF HIS FAMILY IS 37000/-

HOPING FOR A GOOD REPLY.

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3 Replies

SAURABH NENE (Chartered Accountant) (226 Points)
Replied 19 February 2014

Generally banks sanction Housing Loans to the extent:

75% to 80% of the cost of house or

Such amount of loan which will have an EMI up to 50% to 60% of the net montly income of the borrower.

As far as rent is concern, banks generally allow the moratorium period up to certain months or till the time borrower gets the possassion of the house. So that borrower need not pay the EMI for new house and Rent for the present house simultaneously.

Vardan Singh Sengar (Accounts Manager in Private Company) (433 Points)
Replied 19 February 2014

SO UNDER THE CONDITION I HAD GIVEN. WHAT STEPS SHOULD A PERSON TAKE IN ORDER TO ERADICATE THE RENT PAYABLE & ACQUIRE A NEW HOUSE AND PAY FOR THAT??

Mihir (Wealth Manager) (5293 Points)
Replied 19 February 2014

If the bank approves the home loan application, the principal amount of upto 1 lacs p.a is deductible u/s 80C, and interest amount of upto 1.5 lacs p.a is deductible u/s 24. OR you may take a home loan for a flat, and sub-let the existing flat. This way you probably earn the rentals from the flat to pay for the EMI.