Housing Loan Interest and Principal

Tax queries 1413 views 5 replies

Suresh Chandra

Manager - Accounts

206 Points Joined April 2009

Dear sir, My father having a property in Vizag. He is the real owner and I want to take Housing Loan on that property. is it possible to take housing loan to me? because owner ship is in the name of my father. can claim Housing loan Interest and Principal as deduction from my salary? Please tell me the provisions regarding this. Thanks / Regards.

Replies (5)

Sunil Liladhar Kotak

Manager (F & A)

2025 Points Joined December 2008

sorry dear but it is not possible & u can not take the loan in your name as the loan can be taken in the name of the person who is the owner of the house.

also for the purpose of housing loan it has to be a buying of house. if after buying the house u r taking the loan, only martgage loan can be sanctioned to u. it can not be termed as the housing loan.

for further query u can reach me on sunil.kotak @ money-matters.in

thanks

sunil

Guest

Dear Mr. Suresh,

For the housing loan some conditions should be meet and for your convenience, I'm depicting conditions here below, check it and test your eligibility though these conditions :-

Eligibility

You are eligible for a loan under

jointly as husband-wife/parent-son/parent-daughter, if you are

Indian resident having regular source of income.

Minimum 21 years of age.

Maximum 65 years of age inclusive of repayment period

Singly or Jointly as Husband-Wife, Parent-Son & Parent-Daughter

Maximum 75 years of age for Senior Citizens availing finance to secure Shelter in Old

Age Home against full coverage by Bank’s own Term Deposit.

Purpose

Purchase of new independent house/ready built flat for residential purpose.

Construction of independent house on the site already owned by the applicant or site proposed to be purchased from own sources.

Purchase of old house/flat not more than 30 years old, free from tenancy and constructed as per approved plan.

Extension/Repair/Renovation of existing house/flat not more than 50 years old.

Takeover of home loans availed from other banks/FIs subject to certain terms.

Purchase of plot of land for housing purpose under certain conditions.

Quantum of loan

The quantum of loan will be decided as per loan entitlement subject to a maximum of 85% of the total project cost of construction/purchase price of house/flat. Required margin of 15% may be by way of cost of land.

Quantum of loan for furnishing will be 75% of cost of such furnishing subject to a ceiling of 20% of loan eligible for construction/acquisition of house/flat.

The area-specific maximum limits for construction/purchase are as under :

Rural Areas : Rs.25 Lac

Semi-urban/Urban/Metro Areas : Rs.100.00 Lac

Maximum limits for Repair/Extension/Renovation are Rs.7.50 lac in rural areas and

Rs.25.00 lac in Metro/Urban/Semi-Urban areas.

Purchase of Land – financing the cost of land in deserving cases upto 50% of cost of land purchased from Urban Development Authorities/Govt. Bodies subject to the ceiling of 30% of the project cost (i.e. Cost of land + Construction Cost).

Loan Entitlement

Within the above limits, loan entitlement will depend on the following income criteria:

Monthly income should be equal to/more than EMI + Rs.4,000/- in case of a family with up to four members – Salaried/Non-salaried and agriculturist and bank’s own staff are entitled for loan

With increase in number of members, monthly income requirement goes up progressively by Rs.1,000/- for each additional member. Income of spouse & major children may be considered for enhancing the loan entitlement on their agreeing to stand as guarantor/ co-obligant

Loan limit can be enhanced if additional liquid security is offered.

Second Loan- Allowed for repair/renovation/extension of existing house after one year of first loan with minimum margin requirement of 25%

Processing Fee

0.5% of the loan amount minimum Rs.1000.00. Only 0.25% payable on issuance of in-principle sanction. Balance amount payable on final sanction.

Guest

Mr . Kotak is absolutely correct on the point of "u can not take the loan in your name as the loan can be taken in the name of the person who is the owner of the house" but your father is resale the house thn in that case you can purchase a house though by loan this is exeptional case..You can do it so. Talk to bank home loan dealers they have many suggestions for you ;-)

Feel free to revert for further clarification.

Mohammed Asif

CA Final Student

110 Points Joined May 2009

Dear Sunil,

i am also member of CA Club india i saw your reply to one of the member for housing loan incidently i also have one query if you could resolve it please.

can i take housing loan for property under construction if yes than what is the basis for calculation of EMI by the banks as all the payments will not be made upfront but on the basis of % of completion (WIP for that matter).

please advise your reply will be highly appreciable.