You know what is home loan. You also know what are its types, its significance, tenure, rate of interest, processing charges, foreclosures, etc. The internet is flooded with such articles/blogs. All lender – Bank/NBFC/HFC sites also excels in making this information available to you. But what you don’t know is the following vital facts in home loan which are pivotal in availing a loan. The following questions and its relevant answers will ensure you are aware on these facts of home loan that remains unknown to many.
No one file is similar to another and so are the challenges involved in processing the file. The following questionnaire and its answers were derived from such difficulties faced during processing the home loan applications.
Q. Why an under-construction property home loan cannot be transferred?
Ans: The lender - Banks/NBFCs/HFCs does not transfer a home loan which is not fully disbursed which means only the property whose possession is given by the builder can be transferred because in under-construction period the loan is disbursed only partially as per the demand from the builder and the borrower pays only the interest to the lender. This is referred to as Pre-EMI. The full repayment of loan EMIs starts only after taking the possession of the property.
Banks/NBFCs have their own set of regulations for home loan on under-construction property which usually differs from lender to lenders. The basic two conditions for transferring the under-construction property home loan for the lenders are:
- Either the property needs 100% completion or
- The builder project must have the APF from the lender in which the home loan is to be transferred.
Q. Why are the fixed interest rates higher than the fluctuating interest rates?
Ans: In fixed interest rates the EMI is known in advance. You are sure of the EMI’s - fixed amount. You can therefore plan for the cash outflow accordingly to the EMIs. Even if the inflation and the RBI’s repo rate change, the fixed interest EMIs remains unaffected. The lenders offering fixed interest rates losses their profitability when interest rates get hiked because they keep charging you at the fixed rate. Therefore, the lenders set higher margin in fixed interest rates which are 1% -2% higher in comparison to the floating interest rates.
Q. Can a loan borrower apply for multiple home loans with the same lender Bank/NBFC/HFC?
Ans: Whether you are allowed to apply multiple home loans with a lender depends entirely on the lender’s home loan polices & regulations. It is purely at the discretion of the lender. According to the policies of some of the leading banks, you are not allowed to apply more than 3 home loans with them whether applied one time or over a period of time (excluding the home loans taken and closed.
Q. Why a loan cannot be disbursed without a NOC?
Ans: NOC – stands for No Objection Certificate, and is of vital importance in loan disbursement. A NOC needs to be obtained from the builder/ society. Obtaining the NOC for home loan means obtaining the clarification on the property i.e., the property has no claims, no pending customer dues, is clear from all encumbrances and has a clear and marketable title. Banks have their specific formats for NOCs. Getting a clearance i.e., getting an NOC, gives lender a no risk exposure on the property disputes and legal issues preventing the home loan defaults and hence they do not lose their money and the interest.
Q. Why is pre-EMI charged even when the disbursed cheque is in transit?
Ans: In home loan the lender provides you a separate home loan account wherein the loan amount is disbursed and you therefore get a home loan account number on disbursement of your home loan. As per the process, once the funds are out from the bank’s account, they are credited to your home loan account and then are redirected to the respective account of the seller (builder or reseller). The lender starts charging the interest the moment the funds are out from the bank. It is therefore up-to you whether to take the disbursement through cheque or demand draft or through NEFT or RTGS, because the lender will charge you with pre-EMI (only interest) on the disbursement amount till your first EMI date.
Visit Loanfasttrack for more such information on housing loan in Mumbai, mortgage loan in Mumbai, personal loan in Mumbai, business Loan in Mumbai, unsecured business loans,home loan transfer, top-up loans and loan transfers. Loanfasttrack is a Mumbai based loan provider company since 2015 offering loan services in Mumbai.