Frequently Asked Questions Home Loans Asset

Frequently Asked Questions : Home Loans Asset

What is the process of applying for a Home Loan?

Step 1: Submit your loan application along with required set of documents.

Step 2: Your application would be assessed on the basis of various eligibility and funding norms.

Step 3: A property valuation and title check may be carried out by the company representative to determine the property value and legal clearance of the property to arrive at the loan amount.

Step 4: Based on the internal and regulatory guidelines, Housing Finance Companies may approve or reject the loan application.

Step 5: Submission of the original property documents are required along with signing of agreements, handing over of registered property papers and submission of post-dated cheques/ECS.

Step 6: Upon finding all the documents in order, Housing Finance Companies will disburse the loan amount to the developer/contractor based on the progress of construction. The EMI/Pre-EMI will commence after the disbursement.

Am I eligible for a Home Loan?

You are eligible for a loan if you are an Indian citizen or a person of Indian Origin and are a salaried/ self- employed professional/ a businessman. Your loan eligibility will be determined by HFL on the basis of professional income, age, qualifications, number of dependents, co-applicant’s income, assets, liabilities, stability and continuity of occupation, savings and prior credit history. Further, the loan eligibility will also be dependent on the value of property selected by you.

What percentage of property value can be funded?

We can fund up to 90% of the property value in case of Home Loan and up to 60% in case of Loan Against Property. However, HFL funding norms may change from time to time and from property to property or based on the loan amount.

I purchased a property 3 months back; can i get a Home Loan?

Yes, you can avail re-finance at applicable Home Loan rate within 6 months from the date of property purchase.

What is EMI and Pre-EMI?

Your loan is repaid through Equated Monthly Instalments (EMI), which includes principal and interest component. EMI repayment starts from the month subsequent to the month of final disbursement. Pre-EMI Interest is the simple interest, payable every month till the time loan amount is not fully disbursed.

In case of change of floating rate of interest, will my EMI change or tenure?

Keeping the borrower’s convenience in consideration, EMI is kept constant and residual loan tenure is adjusted. Under exceptional situations, the EMI is changed to support the principal repayment, within a time frame.

What security do I need to provide?

The prime security for the loan is by way of deposit of title deeds and/or such other collateral security as may be decided by HFL. The title of the property should be clear, marketable and free from any encumbrances.

Can I prepay my Home Loan? Are there any charges applicable?

Yes, home loan can be prepaid. Part payment is to be made vide a cheque at any of your nearest Housing Finance Companies branches. The cheque should be in favour of “Housing Finance Companies Finance Limited ”, from any of the loan applicants bank account only. Part prepayments are to be made between Monday to Friday, from 6th till 24th of the month. For applicable loan pre-payment fee, kindly refer to the Schedule of Charges under “Fair Practice Code” section on our website

What does fixed rate of interest mean?

Housing Finance Companies offers a pure fixed rate of interest from the day of first disbursement for a specified period as per the extant loan scheme, prevailing at the time of availing the loan. Thereafter, for the residual loan tenure, the outstanding principal loan amount automatically moves to a floating rate of interest at the then prevailing rates of interest.

When can the customer avail of the disbursement of his home loan?

Customer’s loan will be disbursed after he has selected the property, applied for his Home Loan, submitted the requisite income and property documents, the property is technically and legally sound and customer has paid his own Contribution towards the purchase of the property. The disbursement would be in Indian Rupees and made at the Housing Finance Companies branch in India, as specified by him.

The cheque for the loan amount is drawn in favour of the Developer or the Seller (in case of a resale property) as the case may be. In case of an under-construction project, Housing Finance Companies disburses the loan amounts proportionate to the stage of construction.

How do I get my Income Tax certificate?

Income Tax certificates can be availed from:

How do I replenish exhausted PDCs?

1. Kindly submit the Post Dated Cheques to your nearest HFL branch before the EMI due date to avoid any late payment charges.

2. Repayment of loan is preferred through ECS.

What is the meaning of NPA?

As per the regulatory guidelines, a loan account is classified as Non Performing Asset if the interest/EMI due to be repaid is not paid for 90 days.

What is the implication of the loan account being classified as NPA?

Recovery proceedings under SARFAESI Act 2002 will/can get initiated by HF for NPA accounts. Proceedings include taking possession of the underlying collateral/security ,for disposal to recover dues.

How can a NPA account be regularised?

As per the RBI circular RBI/2021-2022/125 DOR.STR.REC.68/21.04.048/2021-22 of 12th November 2021, customer will need to pay the complete/entire overdue amount (all unpaid EMI+ interest) for the account to be reclassified as ‘standard’. Partial payment will not regularise the account.

Frequently Asked Questions :Home Loan Asset – NRI

What is the definition of a NRI?

NRI definitions under FEMA:

The most relevant definition concerning an NRIs various bank accounts and investments in movable and immovable properties in India is the one provided under FEMA, which has replaced the Foreign Exchange Regulation Act , 1973-(FERA) with effect from 1st June,2000. Person Residing outside India is the term used for an NRI, being a person who has gone out of India or who stays outside India for the purpose of employment or carrying on business or vocation outside India or any other circumstances which indicate his intention to stay outside India for an uncertain period.

How can customer repay the loan?

Housing Finance Companies offers various modes for repayment of the loan. Customer may either issue post-dated cheques or standing instructions to his banker to pay the instalments through ECS (Electronic Clearing System) from your Non-Resident (External) Account / Non-Resident (Ordinary) Account in India. Cash payments will not be accepted.

How is my loan reassessed if there is a change in status from Non-Resident Indian to Resident Indian?

In the event of customer getting re-located back to India, Housing Finance Companies reassesses the repayment capacity of the applicant(s) based on Resident status and a revised repayment schedule is worked out. The new rate of interest will be as per the prevailing applicable rate of Resident Indian loans (for that specific loan product). This revised rate of interest would be applicable on the outstanding balance being converted. A letter is given to the customer confirming the change of status.

Is the Customer required to be physically present in India at the time of availing loan?

Customer need not be present in India to avail of your Home Loan. In case customer is posted abroad at the time of submission of the loan application and disbursement of the loan, he/she can avail the loan by appointing a Power of Attorney as per Housing Finance Companies’s format. The Power of Attorney holder can apply and carry out the formalities on his behalf.

What is a Power of Attorney?

A power of attorney is a resident Indian appointed to act on behalf of all the applicants through an execution of the Specific Power of Attorney (SPOA) deed. It is mandatory for both the applicant and co-applicant execute the SPOA in favour of the person concerned. If the co-applicant is a resident Indian, he / she can also be the SPOA through the execution of the SPOA by the applicant.

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