Team-BHP - Help with a home loan!

Quote:

Originally Posted by archat68 (Post 2040307)

I also have a similar query. Can anybody give some first hand input?

Ok, let me give some information which I had observed during my friends transaction of a sale of his flat.

Bought it around 20 L. Registered it in his name. Not entered the house. He wanted to exit the flat, as he was not able to manage the EMI's. Found a buyer for the same. Asking price was 25L. Since he was already paying EMI's, he intimated the his holding bank that he plans to close his housing loan. Got the total details like Prepayment charges, principal outstanding. Now the buyer's bank gave a cheque for the total outstanding including the prepayment charges to my friends bank, before his presense, got the documents released. Lets say its 19L. Remaining 6L balance can either be paid by the buyers bank to my friend or the buyer can pay the same to my friend from his own pocket. All trasactions are white in color and PAN numbers were taken. All parties have the photocopies of all the documents signed.

Hope this helps

There are two kinds of loans:

1. Equitable Mortgage
2. Registered Agreement

#1 is most common, in this case loan agreement is not registered with registrar (hence lesser paperwork). This kind of agreement requires bank to posses "Title/Dale Deed", in this case agreement between builder and buyer.

Mortgage law - Wikipedia, the free encyclopedia

In case of #2, property is "Officially" registered with government registrar as being under mortgage. In this case, bank might allow you to keep original deed since it has been superseded by loan agreement.

Only few govt banks would go for option #2 since it increases legal and documentation costs. And prepayment also requires more paperwork.

Security interest - Wikipedia, the free encyclopedia

Quote:

Originally Posted by DCEite (Post 2154942)

Had a question.

When home loan for an under construction property is sought, does the home loan finance bank require keep the *original* builder-buyer agreement with it until the home loan is fully paid back ?

Absolutely. The Bank would keep the original agreement document till the loan is fully paid back. Otherwise what surety do they have in case they dont have the agreement?

If under constrtuction, the bank would be releasing the payment to the builder part wise till the final construction is completed. You could opt for pre EMI till the possesion of the home is not handed to you.

Quote:

Originally Posted by ghodlur (Post 2155961)

Absolutely. The Bank would keep the original agreement document till the loan is fully paid back. Otherwise what surety do they have in case they dont have the agreement?

In case of registered loan agreement, bank has the title of asset (Land/Apartment) in registrar's office. So, a sale agreement can not be registered for that property. It is like hypothecation that is marked on RTO's records for a car bought on loan.

In case of "Equittable Mortgage", agreement is not registered with registrar (it only stamped, I.e. done on a stamp paper). In this case, bank needs to keep complete chain of agreements as surety.

Quote:

Originally Posted by triedeverything (Post 2189482)

Does anyone know if banks give out loans to people who want to buy a house in another city? I stay in Bangalore and am looking at properties in Mangalore or Coorg. Has anyone purchased their first property like this using a housing loan?

This transaction is possible, with the usual *(conditions apply).

Usually most bankers insist that they will fund properties only in the cities where they have a branch, and also they will fund only to people who live and work in cities where they have a branch.

So, you need to find a bank which has branches in Bangalore as well as Mangalore / Coorg, and then approach them for loans. Once these conditions are fulfilled, there will not be any issue for you.

Cheers,
R_S

Quote:

Originally Posted by triedeverything (Post 2189482)

Yes, its possible. I had done this in 2003. I stay in Bangalore and bought my first flat in Madras. I took home loan from ICICI. As roadie_switft mentioned, fina a bank with branches in both the places (where you stay and earn and where the property is). Ensure you documents are clear and they will do personal verification of the property and the bank's legal formalities.

To answer you question straight, on the whole, it should not be a problem to get a loan for a property in another city.

BTW, as an additional information, if you plan to claim tax benefits for this home loan where property is not in the city where you earn, you should declare the Fair Rental Value (FRV) fixed by local municipality (in your case Mangalore/Coorg) if the property is ready to occupy. This FRV will be deducted from the entire home loan benefit.

-Ravi

Quote:

Originally Posted by DCEite (Post 2189694)

Guys whats the latest on service-tax on under construction properties ?

I had booked an under construction flat in March 2010, and now builder is asking me to pay service-tax for the construction linked payments made after July 2010.

Is that so?

Yup, I'm afraid it is actually so.

From 1st July 2010, the Govt has brought the housing construction industry under the ambit of service tax. Rate of Stax is 10.3% including edu cess.

However, initially as per the mandate, 33% of the base value (consideration amount) of the flat was to be taxed, which has subsequently been amended to 25%.

So for a 1-Cr property, 25 Lacs will be taxed @ 10.3% as Stax.

Cheers,
R_S

Quote:

Originally Posted by ghodlur (Post 2195957)

BHP experts,

I have a query related to home loan. I am currently in the process of selling my flat but have an outstanding loan amount.

1) Is it possible for the bank to transfer the outstanding loan to the buyer if he opts the loan from the same bank? - Yes, it is possible. It's called a Third-party HL in Bank parlance.

2) What if the buyer needs a loan more than my loan outstanding? Will he be eligible for the same. - That will depend on his income documents and credit assessment done by the bank, along with the property valuation. However, hypothetically, he can avail of as much loan as he wants, above factors permitting.

3) How does the new agreement happen in this case? - In such cases, banks issue a Final Sanction Letter to the buyer, basis which you two draft an agreement which mentions the details of the payments. E.g. "Total consideration of Rs. 100, of which Mr. X (buyer) will pay Mr .Y (seller) Rs. 20 by cheque # 123456, and the balance Rs. 80 will be paid by ABC Bank pursuant to the Sanction Letter dated dd/mm/yy issued by them." This agreement will then be registered, post your having accepted the payment which the buyer is going to give you, preferably in the presence of a banker/bank's lawyer. Once it is registered, then the bank will take the agreement into its custody, and then release the balance payment in your name. (**I have excluded certain procedural steps for the sake of simplicity, but essentially it's the same process.)

4) Any other easire way out to minimize mine as well as the buyers work. - I think this is the simplest way. The only alternative is either you or the buyer closing out the bank's loan. This will entail certain issues -

Where will either one of you get hold of the money?
Even if you have the money, why would you want to pull it out of the working capital in any case?
If you close the loan from your own/temporary source of funds, and then the buyer declines the transaction - then what?
*Worst case, only theoretical, pls don't take offence - If the buyer closes the loan from his own/temporary source of funds, and then you refuse to sell the property - then what?
In either of the above two cases, at what exact time do you execute the agreement? There will be a lot of distrust on both sides.
Lastly, you will have to pay 2% or 3% of the principal outstanding to the bank as foreclosure charges, which the bank will be happy to waive off if the buyer is also availing a loan from the same bank. For a large-ticket loan, this 3% can be quite a bit of saving for you.

Need advise on this one please

Hope the above the responses help. Please let me know in case you need any more help.

Cheers,
R_S