Home Loan FAQs?
1. What is a Home loan?
Home loan is the sum of money a bank or financial institution lends you to help you buy your dream home.
By taking a home loan from a bank or a housing finance company
you pledge your home as the lender’s security for repayment of your 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.
Home loans are generally taken for long tenures as the loan amount is usually a huge sum. A home loan can be taken anywhere between 5 and 30 years. The amount of loan one is eligible for is dependent on the individual’s credit profile.
2. What is a down payment? What are the ways in which I can source my down payment?
Generally as a thumb rule, banks or financial institutions lend 85% of the cost of the property. 15% of the money is expected to be paid as a down payment for the loan.
Opting for a personal loan if you can afford that cost as well, pledging your investments, getting loan against your insurance policy etc. are some ways to liquidate your assets and pay your downpayment.
3. Are there any specific loans available for NRIs?
Yes, there are specific loans that are tailored for the requirements of NRIs who wish to build or buy a home in India.
4.What is reverse mortgage?
This loan facility allows a senior citizen (above 60 years of age) eligible to apply for a reverse mortgage loan and avail 60% of the value of the residential property he resides in and retain the right to continue to reside there. The maximum tenure for this loan scheme is 15 years.