Home loan

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.

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??

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.