Terms associated with Home Loan

1. Terms associated with Home Loan In India

2. Roti, KapdaaurMakaan is the basic need of every individual and we all dream of having a home. But homes are expensive and Home Loans can make dream of owning a house a reality. Home Loan is offered to individuals who wish to purchase or construct a house. The property is mortgaged to the lender as a security till the repayment of the loan. The bank or financial institution will hold the title or deed to the property till the loan has been paid back with the interest due for it. This article covers the term associated with home loans. We suggest our readers to read the lending institutions website to familiarise with the Home Loan Terminology and get Overview of Home Loan .

3. Down payment or Margin Because houses are expensive, home buyers typically pay a percentage % of the total value of a home. The remaining price is covered by a bank or other financial institutions through a mortgage or home loan online. The amount that a home buyer pays is called as down payment or Margin. For example if you plan to purchase a property worth 80 lakhs, and the bank can fund up to 80% of total amount, which is 64 lakhs. You will have to pay remaining 16 lakhs. In Jul 2010, RBI set a ceiling limit on home loans to 80% of the property value. But in case of small value housing loans, up to Rs 20 lakh, home loan lending institutions can provide loans up to 90% of the property value, as such loans are part of priority sector advances. Please note Down payments usually do not include costs such as registration charges, stamp duty costs etc.

4. Loan to Value Ratio LTV (Loan to Value) ratio is loan amount divided by the agreement value of the property for example, if the value of the property is Rs 40,00,000 and the lender is giving you a loan of Rs 28,00,000, the LTV is 70%.

5. What is Resale Property Resale means you are not buying an apartment in a building under construction, or a ready flat, directly from the builder. Instead, you are buying a flat from the owner. While buying resale property, one should make sure that it has clear marketable property title , it has record of all previous owners of property and the reseller has undisputed ownership. One should also check for the existing loan on the property and be aware of the amount that is to be paid to the society at the time of transfer of ownership

6. What is Freehold Property? What is Leasehold property? A freehold property means that you own the land it is built on and also the house. For apartments, ownership of the plot is shared jointly with the other owners of the respective flats within the building in proportion with the ratio of the area owned of the consolidated built-up area. In a freehold property. You can live there for as long as you desire. Home loan online You have the right to make alterations to the house or redo some parts of the house though You might have to take permission from authorities if you have to make structural changes.

7. Source:Source: http://www.bemoneyaware.com/blog/terms-associated-with-home-loan/ Thank You! http://www.facebook.com/idbibank https://plus.google.com/+IDBIBank https://in.linkedin.com/company/idbi-bank http://www.twitter.com/idbi_bank http://www.youtube.com/idbibank