To be eligible for a home loan, the applicant must be at least 21 years of age with a regular source of income from employment or self-employment. The loan must terminate before or when the applicant turns 65 years of age.
To be eligible for a commercial loan, the applicant must be at least 21 years of age with a regular source of income from employment or self-employment. The loan must terminate before or when the applicant turns 65 years of age. The loan can be for the purchase/construction/extension of a non-residential property. A loan for renovation will only be given at the time when the property has been acquired. Professionally qualified and self-employed individuals can apply for a loan but a minimum of 3 years of work experience is a necessary.
The loan amount depends on a number of factors such as age, income, number of dependents, qualifications, assets and liabilities, income stability, business profits, etc. However, there are several ways in which one can increase loan eligibility and amount. If a spouse or fiancée is earning, applying together as co-applicants can increase chances of a larger loan amount. In such cases, proof of marriage must be submitted. On the contrary, if there are any co-owners they must necessarily be co-applicants. Providing additional security like bonds, fixed deposits and LIC policies may also help to enhance eligibility. However, the most important factor in sanctioning loans is repayment ability. The total cost includes registration charges, transfer charges and stamp duties.
Documents required for self-employed persons:
Documents required for employed persons:
The loan will be sanctioned after the selection of property and submission of the required legal documents. The process might take some time as each document needs to be verified for the safety of the applicant. The 230 A Clearance of the seller and / or 37I clearance from the appropriate income tax authorities (if applicable) is also needed. Once the above has been submitted and verified, the registration of the conveyance deed and investment of the applicant's own contribution and the loan amount will be disbursed by the bank. The disbursement will be in favour of the builder.
Documents required for disbursement:
A stamp duty is a kind of tax that is levied on the transactions concluded by way of documentation or instruments. The tax was sealed by the Bombay Stamp Act (1958).
As per the regulations of this Act, the buyer must pay a 5% stamp duty on the cost of the flat. This payment is a pre requisite for the full ownership of property and the consequences for evasion of stamp duty can even lead to imprisonment. For residential spaces that cost above Rs. 500,000/-, the purchaser must pay an excess stamp duty of Rs. 7650/- (plus 5%). For commercial spaces, the stamp duty is simply 5%. However, these rates are subject to change.
Once the buyer decides to purchase a residential property, the stamp duty is calculated according to the agreement value or the market value, whichever is higher. The investor will then need to obtain a pay-order, which must be addressed in favour of "Superintendent of Stamps, Mumbai". After the submission of the pay-order, the agreement is completed and signed by all parties.
The process of registration involves the submission of transaction documents (copies) to the required governmental officer for preservation. Once the stamp duty has been paid on a document, it has to be registered under the Indian Registration Act (1908) with the Sub-Registrar of Assurances of the locality of the property. Unless this procedure is completed, the investor does not have full ownership of the property.
The original copy as well as two photocopies of the document must be submitted to the Sub-Registrar of Assurances. The procedure also includes a registration fee for properties costing more than Rs. 30,000, which is fixed at 1% of the market value or the agreement value, whichever is higher. Once again the value is subject to change. The procedure can only be completed under the presence of two eye-witnesses. When a receipt with a distinct serial number is issued, the procedure is complete.
A Non-Residential Indian is a citizen of India who lives abroad for employment, business or vocation purposes for an uncertain amount of time.
NRIs do not require the permission of the Reserve Bank of India in order to purchase immovable property and can obtain loans for the purchase of such property from certain financial institutions. However, the repayment of the loan must be made within 15 years of taking the loan. Furthermore, NRIs must have stayed in India for a period of 182 days or more within an assessment year or they should have stayed in India for at least a total of one year or more.
NRI investors have different conditions for purchase than residents. He/she must be at least 21 years of age with a minimum of $2000 monthly income. An NRI is not allowed to make Equal Monthly Instalments (EMI) through any source other than his/her NRE/NRO account. The eligibility of loan will be determined on a number of factors such as income stability, number of dependents, repayment capacity, cost of property, etc. and can range from 5 lakhs to 1 crore. As in the case of a resident, an NRI can enhance his home loan eligibility by applying with a co-applicant who has a separate source of income.
An applicant will be eligible for a maximum of 85% of the cost of the property or the cost of construction as applicable and 75% of the cost of land in case of purchase of land, based on the repayment capacity of the borrower. Furthermore, the interest rates on home loans for NRIs are higher than those offered to residents. The amount differs by 0.25%-0.50%. Some Housing Finance Company's also having an internally earmarked 'negative criterion' for NRI home loans. As such, the NRIs who hail from locations that are marked as being 'negative' in the books of HFCs, find it difficult to get a home loan.
If the NRI is a person of Indian Origin, a photocopy of the PIO card also needs to be submitted. If the PIO card is unavailable, the applicant's current passport, with birth place as 'INDIA', the Indian passport, if held by the individual earlier or the applicant’s parents/grandparents Indian passport/ Birth certificate/ Marriage certificate is required
NRI's can invest in any immoveable property in India except the following:
Payment of purchase price for acquisition of property can be made only through the following:
NRIs may acquire property in India by ways other than purchase: An NRI being a PIO can acquire immoveable property by way of a gift from the following:
Transfer of Immoveable Properties in case of an NRI citizen of India: