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Old 5th July 2011, 12:42   #211
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Default re: Help with a home loan!

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Originally Posted by NetfreakBombay View Post
HDFC and other private sector banks do not register loan agreement. So cost #2 would not apply.

These banks charge a lump sum amount towards stamp duty that covers duty on Equitable agreement and other related papers that have to be franked as stamp.

With registration, bank becomes legal owner of house till loan is paid in full. You are just "allowed" to stay there. This is similar to the way Car loan works where RTO record itself shows car to be hypothicated to bank.

With equitable mortgage, bank can "become" an owner in case of loan default by initiating foreclosure proceedings.
Little confused, equitable mortgage even HDFC, Axis etc are taking. They are not taking #2. Do u mean without taking #2, bank cannot initiate foreclosure?
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Old 5th July 2011, 18:51   #212
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Default re: Help with a home loan!

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Little confused, equitable mortgage even HDFC, Axis etc are taking. They are not taking #2. Do u mean without taking #2, bank cannot initiate foreclosure?
Another point that dear SBI guys cannot clear is that- how much premium will i need to pay as property insurance which is now mandatory to take with a home loan!! Amazing on how they work, some say less than 10K, while talking to SBI general insurance directly i was given a quote of 24K! Any experience folks have?
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Old 5th July 2011, 19:13   #213
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Default re: Help with a home loan!

I would put it simply, for home loan (or any loan for that matter) try to go with any nationalised banks.

Even though I felt like going with SBI was painful process, nowdays they have also become more friendly and executives are helpful in nature.

The issue with private banks (ICICI, SCB, HDFC etc) is that due to variable interest rates, they increase the rates when ever RBI communicates about a revision of rates, but 'NEVER' come down on rates when rates come down. SBI particularly never the case, they increase (marginally when rates increase) and have seen it decrease as well. Also the rates were really lower than any private sector banks. Going for Nationalised banks really worth the effort.

PS: I have first hand experience dealing with home loans of Standard Chartered Bank and SBI, and a couple of my friends and brother also deal with other banks - so the above statement.

MKH: Registering property with the bank (SBI) is a process to take care of any defaulting happens - it becomes easier for the bank to proceed with taking over the property. The private banks just does it only on stamp paper I think, no need to register at the registrar office. That registering cost shouldnt be a deciding factor not to go with SBI, the amount will be made up in the first year itself - no worries.

Cheers
narayanang76

Last edited by narayanang76 : 5th July 2011 at 19:22.
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Old 5th July 2011, 22:19   #214
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Default re: Help with a home loan!

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Little confused, equitable mortgage even HDFC, Axis etc are taking. They are not taking #2. Do u mean without taking #2, bank cannot initiate foreclosure?
There are two kinds of home loans. Item #2 is required or not depends on type of loan.

Most private banks do not opt for registration of loan agreement. This saves cost as well as hassles. This kind of loan is called "Equitable Mortgage". Bank will keep original documents for security and can start "Foreclosure" if there is default.

Other kind of loan is registered mortgage. In this case Banks becomes a registered owner at start of loan and you need to reverse that after closure. In this case bank need not initiate foreclosure and can directly evict customer in case of default*. This is like hypothication of a car.

From customer's point of view, equitable mortgage is beneficial. Specially if:

1. loan is closed before time
2. you plan to sell the property

Task #2 is quite complicated in case of registered loans. As this would become tri-party agreement and handling cash component would be tricky unless buyer is cooperative.

Quote:
Originally Posted by mkh View Post
Another point that dear SBI guys cannot clear is that- how much premium will i need to pay as property insurance
Best bet is to:

1. Confirm with builder / society if property is already insured or not. In Mumbai, all housing societies are. You just need to provide certified copy of that cover to bank.
2. Ask for quote from multiple companies via an agent. This should not cost more than 2k per year.



*Not 100% correct technically, but in layman's terms bank becomes owner at start of loan. Actual implementation is quite tricky and is usually 3 - 4 pages long.
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Old 10th July 2011, 20:47   #215
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Default re: Help with a home loan!

My situation does not allow me to risk it with SBI, they are taking 1-2 months min for giving the amount and then i am faced with paying interest. LIC housing is decent too and in the same league as SBI, considering they are a govt agency. They seem not to enforce the registration of the loan (Mortgage stamp duty) and also no forced property insurance.
That apart, any inputs on LIC housing? They are offering 11% fixed for 5 years, in the current scenario since none is offering fixed, looks like that next 3 years - till elections i.e the rate will be around this or upwards. Any thoughts?
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Old 10th July 2011, 21:53   #216
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Default re: Help with a home loan!

Stay away from SBI. Consider following:

1. HDFC (NOT HDFC Bank)
2. Bank of Baroda
3. LIC Housing Finance

11% fixed for 5 years is a very good rate. What is the loan amount? Rate depends on loan amount/tenure and customer's credit score.
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Old 10th July 2011, 22:04   #217
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Default re: Help with a home loan!

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Originally Posted by NetfreakBombay View Post
Stay away from SBI. Consider following:

1. HDFC (NOT HDFC Bank)
2. Bank of Baroda
3. LIC Housing Finance

11% fixed for 5 years is a very good rate. What is the loan amount? Rate depends on loan amount/tenure and customer's credit score.
Amount about 35 avg for 1st year. HDFC is not giving fixed rates at all. BOB- no option
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Old 19th August 2011, 17:50   #218
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Default re: Help with a home loan!

I have recently constructed a house and had taken a loan from IDBI. I am in a situation that the construction is over but im to pay some 6-7 lakhs to my engineer. He is ready to wait for 3-4 months. I tried getting a home extension loan from IDBI and was told that they wont finance a 100% completed project. Im totally confused on what to do. One agent from IDBI told me to move the loan to Axis. He was saying that on moving, they will provide extra loan. This agent is moving his job to Axis so I'm not sure about this. Is it true? Also any other pointers will be helpful
Thanks!
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Old 19th August 2011, 18:48   #219
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Default re: Help with a home loan!

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Originally Posted by rajesh1868 View Post
I have recently constructed a house and had taken a loan from IDBI. I am in a situation that the construction is over but im to pay some 6-7 lakhs to my engineer. He is ready to wait for 3-4 months. I tried getting a home extension loan from IDBI and was told that they wont finance a 100% completed project. Im totally confused on what to do. One agent from IDBI told me to move the loan to Axis. He was saying that on moving, they will provide extra loan. This agent is moving his job to Axis so I'm not sure about this. Is it true? Also any other pointers will be helpful
Thanks!
To my knowledge ( i may be wrong too), moving from one bank to another you have a chance to get more loan amount by negotiating, but that depends on a fact that it should not be more than the property value itself.

Few banks provide additional amount for furnishing the house, so you could ask the banks in that name as well. Not sure about the details though, as i have not done it.

On the other hand, for a construction completed property, it will be difficult to ask for higher amount than the current loan amount with old bank, but i would suggest to give a try atleast.

Why don't you query with few nationalized banks (like SBI, Indian bank, IOB etc) and see what could be the choice/options you have?

-Ravi
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Old 15th September 2011, 08:49   #220
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Default re: Help with a home loan!

Hows' the feedback about Axis and ING Vysya ?

Also, in today's scenario, does it make sense to go for a fixed 11.25% (3 yrs) or 11.5% (5 yrs) instead of a floating 11%.

In case it is better to opt for floating 11%, is it still valid if the bank is more known to increase the floating but is reluctant to reduce the rates when RBI reduces the PLR ?
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Old 15th September 2011, 09:11   #221
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Default re: Help with a home loan!

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Originally Posted by condor View Post
Hows' the feedback about Axis and ING Vysya ?

Also, in today's scenario, does it make sense to go for a fixed 11.25% (3 yrs) or 11.5% (5 yrs) instead of a floating 11%.

In case it is better to opt for floating 11%, is it still valid if the bank is more known to increase the floating but is reluctant to reduce the rates when RBI reduces the PLR ?
In my opinion, the best in terms of being straight-forward, making no compromises on documentation and transparency would be HDFC and LIC Housing finance. Next would be the public sector banks since they will also not cut corners when it comes to documentation but the process/paper work/follow up required from your end may not make it a very smooth experience.
As far as fixed Vs floating goes, I would say go with floating for any tenure more than 5 years since that's a long enough period within which interest rates are likely to fall (There is also no charge if you're making part pre-payments from your own sources of income).

If you're going for a 5 year loan term and you get an unlikely deal like 9 or 9.5% Fixed rate then it's a no-brainer.
Do not forget to clarify regarding restrictions on total amount of part pre-payments, number of part pre-payments in a year and charges for each such transaction.
In my experience with HDFC, I'm at liberty to make any number of part pre-payments in a year without any charges for the transactions.
Last but not least, For floating interest rates - HDFC diligently reviews interest rates every quarter so chance of upward (or downward) revisions are high. However, I've seen some of my friends enjoy long periods of stable interest rates from public sector banks and upward reviews are few and far between.
Hope this helps and I've not confused you even more

Last edited by NPV : 15th September 2011 at 09:14.
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Old 15th September 2011, 09:26   #222
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Default re: Help with a home loan!

@NPV, thanks

The question was for a home loan, with the usual 15-20 yr term. HDFC offers either floating or fixed for initial 3 or 5 yrs, and then floating / not specified.

Now, from what I have read earlier in this thread, HDFC's floaters are rise happy, but reluctant to reduce. If so, HDFC will raise the applicable rates with each increase of the PLR by RBI, but will not reduce the applicable floating rate when RBI reduces the PLR. Hence, is it better to go fixed for first 3-5 yrs, and later switch (whenever rates reduce).

OTOH, hopefully home loan rates will not go too high beyond current levels (too high a PLR isnt good either, and neither are high home loan rates).

What say ?
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Old 15th October 2011, 21:03   #223
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Default re: Help with a home loan!

I am looking for a home loan in market and have narrowed down to SBI and LIC Housing Finance. Not interested in any private banks. Can any one suggest which one is better,

SBI:
1) Can we track the home loan account online and use the same for printing account statements, especially for the TAX proof?
2) How effective is the customer care?
3) "Building Insurance", is this mandatory? Any idea about the premium?
4) "SBI life insurance", is this mandatory? Any idea about the premium?

They said it will take 3 weeks for the loan process. Also, they have requested for gazillion documents. Is it worth waiting for 3 weeks and provide all those documents?

In LICHF, they confirmed that within 7 working days they will finish the loan process and they have requested for very basic documents only. The process looks to be easier than SBI.

On long term basis which is better? SBI or LICHF? Please suggest. Any scope for negotiations either on the interest rate or the processing fees?

SBI - 10.75% floating, > 30L
----------------------------

Processing Fees:

Legal Charges Rs. 1500/-
Valuation Charges Rs. 1500/-
Processing Charges 0.25 % Max Rs.10000/-
Document Charges Rs. 1500/- (approximately)
E M Creation Charges 0.10 % of loan amt

What is EM creation?

LICHF - 11:00 floating > 30L
----------------------------

Processing fess is 10000 + Service tax
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Old 16th November 2011, 19:41   #224
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Default Help with a home loan !

My brother in law is in very desperate situation. He has applied for loan with HDFC. The property is a 1BHK apartment and he is going to be the third owner.
The total price is 26.5 lakhs. We have already paid 13 lakhs to owner and are waiting for 13.5 lakh to be approved.

HDFC is asking for original agreement between the builder and first owner.
Is that a valid requirement? First owner is dead and there is no way we can get that agreement.
Is there any workaround available ? Is HDFC just asking for this document because they dont want to give loan ?

Let me know if anyone was asked this kind of document.
Thanks
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Old 16th November 2011, 20:21   #225
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Quote:
Originally Posted by arun_josie
I am looking for a home loan in market and have narrowed down to SBI and LIC Housing Finance. Not interested in any private banks. Can any one suggest which one is better,

SBI:
1) Can we track the home loan account online and use the same for printing account statements, especially for the TAX proof?
2) How effective is the customer care?
3) "Building Insurance", is this mandatory? Any idea about the premium?
4) "SBI life insurance", is this mandatory? Any idea about the premium?

They said it will take 3 weeks for the loan process. Also, they have requested for gazillion documents. Is it worth waiting for 3 weeks and provide all those documents?

In LICHF, they confirmed that within 7 working days they will finish the loan process and they have requested for very basic documents only. The process looks to be easier than SBI.

On long term basis which is better? SBI or LICHF? Please suggest. Any scope for negotiations either on the interest rate or the processing fees?

SBI - 10.75% floating, > 30L
----------------------------

Processing Fees:

Legal Charges Rs. 1500/-
Valuation Charges Rs. 1500/-
Processing Charges 0.25 % Max Rs.10000/-
Document Charges Rs. 1500/- (approximately)
E M Creation Charges 0.10 % of loan amt

What is EM creation?

LICHF - 11:00 floating > 30L
----------------------------

Processing fess is 10000 + Service tax
Hi
Dealing with banks for a home loan is a long process and you must be veru patient. Though lic have asked for basic documentation they will keep on asking for more and more documents as time passes. Both instititioms are good to deal with later.

Tax proof will be sent separately. Am not aware of any lender that has it online.

Customer care would be the same

Yes most lenders are insisting on building insurance. I recall paying 14k for 5 years coverage thru sundaram.

Lic will also insist on this. Depends on your age and emi.

Cheers
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