[nowwhat?]

Originally Posted by Pancham

Thanks a lot diyguy. At present I am looking at UCO. A friend of mine is taking a loan from SBI @ 9.75%. I checked online for UCO and came up with rates floating around 9.90%.

Aslo considering the flcutuations in the rates should I go for floating rate of interest?

Thanks hangover. I am a little confused here. Regarding the property documents, I will be receiving them at the time getting possession right? If yes, then thats a good 2 years away.
P.S: Dint think about Vaastu : :/

Given your tight deadline, you might have to approach private banks who are more aggressive such as ICICI, etc. PSU/Nationalized banks (except maybe SBI) might not give you a loan within a week.

Difference between 9.75% and 9.90% will be more than a few installments depending on how long the tenure is.

Why are you fixated on UCO? Banking relationship does not matter at all for a home loan. More importantly, why haven't you approached a bank yet?

Interest rates will go down in the near term, so floating rate is preferred. But bear in mind that if you go for say a 20 year loan, it is hard to predict what would happen. I have posted on fixed versus floating rate on this thread.

Vaastu is a South Indian thing and while I was initially skeptical, I have found that it is mostly common sense advice that works in the Indian environment. However bear in mind that vaastu may have no bearing on resale values in Kolkata.

hangover is absolutely right. You need to get all documents vetted right now by a lawyer. Even if registration is done after possession, for now you should get sanctioned plan, land documents, etc. vetted.

[Pancham]

Hi Nowwhat

Originally Posted by nowwhat?

Given your tight deadline, you might have to approach private banks who are more aggressive such as ICICI, etc. PSU/Nationalized banks (except maybe SBI) might not give you a loan within a week.

Difference between 9.75% and 9.90% will be more than a few installments depending on how long the tenure is.

Why are you fixated on UCO? Banking relationship does not matter at all for a home loan. More importantly, why haven't you approached a bank yet?

We are not fixated on UCO. The problem is since the time is short UCO is willing to release the amount within a couple of days. Also, I have not been much in India in the last 2 months. I have to travel a lot due to work. We received the letter for payment on 13 October 2015 mentioning the due date for payment is 3 November. Also, due to the Durga Puja the banks are/were closed. And to top all this I am still out of country. So the whole situation is a mess. We could have approached a bank way back but we did not. Maybe that was a mistake. :(

Originally Posted by nowwhat?

Interest rates will go down in the near term, so floating rate is preferred. But bear in mind that if you go for say a 20 year loan, it is hard to predict what would happen. I have posted on fixed versus floating rate on this thread.

I am still confused about the period of loan. I am not going to keep it for entire 20-25 year period but at the initial stage of my career I would like to keep my EMIs down.

Originally Posted by nowwhat?

hangover is absolutely right. You need to get all documents vetted right now by a lawyer. Even if registration is done after possession, for now you should get sanctioned plan, land documents, etc. vetted.

This struck me the most. I dont have any of this. We have an allotment letter and the catalogs having drawings and plan of the project. No legal documents there.

[diyguy]

Originally Posted by Pancham

Hi Nowwhat
We are not fixated on UCO. The problem is since the time is short UCO is willing to release the amount within a couple of days.

in my experience the nationalised banks such as uco or bob will not release funds in a couple of days. I had this issue with bob when taking my loan, all sort of promises but when the time came they went back on everything. That was one reason I was pushed into a corner and went with LIC.
Further the builder will wait. Don't worry about the deadlines you get from him. Tell him there are missing documents that the banks want and he needs to provide.
The process should take you atleast 2-3 weeks. What are the pre approved lending institutions that are covering your property? Those will be quicker. They would have done the legal check too if I am not wrong.

[Pancham]

Originally Posted by diyguy

in my experience the nationalised banks such as uco or bob will not release funds in a couple of days. I had this issue with bob when taking my loan, all sort of promises but when the time came they went back on everything. That was one reason I was pushed into a corner and went with LIC.
Further the builder will wait. Don't worry about the deadlines you get from him. Tell him there are missing documents that the banks want and he needs to provide.
The process should take you atleast 2-3 weeks. What are the pre approved lending institutions that are covering your property? Those will be quicker. They would have done the legal check too if I am not wrong.

UCO bank is one of the pre-approved banks. In fact when we went to the book the property UCO was one of the prominent lenders. They were the only one advertising. Later on when I checked the catalogs I realised there were 10 more.
Yes, we are also banking on the builder here. I dont want to do anything in haste. I am going to talk to the concerned person today for an extension.
We are believing what UCO is saying because we have been attached to the bank for a very long time. At present we hold an education loan account with them. Although, most of the staff (including the manager) who knew my mother has left they are still willing to fast forward the processing of the loan. Let me see how far I can get the extension for payment from the builder.

P.S: This is my first big purchase and I dont want to goof up here. Emotions

[nowwhat?]

Originally Posted by Pancham

I am still confused about the period of loan. I am not going to keep it for entire 20-25 year period but at the initial stage of my career I would like to keep my EMIs down.

This struck me the most. I dont have any of this. We have an allotment letter and the catalogs having drawings and plan of the project. No legal documents there.

Thanks for providing some perspective.

First things first, accept that you will not be able to drive all this remotely from abroad. You will need a capable person on the ground and I hope you have one you trust.

Secondly, you are heading in the right direction by asking for an extension of the payment date from the builder. Explain that you have been away for the last 2 months and need at least a month's extension. This would be the easiest thing to do.

Thirdly, get your trusted person to approach a well known lawyer. You may have to pay a little extra (maybe 5-10K more), but the lawyer's office can obtain all documents from the builder, local government agencies, etc. Please note that this may be the single biggest purchase you make in your lifetime and you do not want to wait 2 years and then find out that you ended up with nothing. Common illegalities include flats not in the sanctioned plan (penthouse, certain floors, etc.), entire buildings not in the sanctioned plan, land encroached from government, improper land usage, etc.

Fourthly, go through the list of approved banks and shop for the lowest interest rate leaving all your sentiments aside. If the project is preapproved, the bank will provide you a cheque within 1-2 weeks. I think SBI still provides the lowest floating rate and I would go with them. Check with your friend and contact the same executive if he was happy with the experience.

Based on what you have said, take a longer tenure so you don't live hand to mouth. Your pay will rise and you can comfortably prepay the loan when possible. I once took a 20 year loan and prepaid it within 7 years, the first few years on EMIs were hard but I am glad I took the decision to keep a low EMI as we didn't have much earnings back then.

[Pancham]

Originally Posted by nowwhat?

Thanks for providing some perspective.

First things first, accept that you will not be able to drive all this remotely from abroad. You will need a capable person on the ground and I hope you have one you trust.

I have my mother handling all this while I am travelling.

Originally Posted by nowwhat?

Thirdly, get your trusted person to approach a well known lawyer. You may have to pay a little extra (maybe 5-10K more), but the lawyer's office can obtain all documents from the builder, local government agencies, etc. Please note that this may be the single biggest purchase you make in your lifetime and you do not want to wait 2 years and then find out that you ended up with nothing. Common illegalities include flats not in the sanctioned plan (penthouse, certain floors, etc.), entire buildings not in the sanctioned plan, land encroached from government, improper land usage, etc.

I will get this done. The reason I did not think about this is because the builder is one of the oldest and reputed in the city. But still you never know.

Originally Posted by nowwhat?

Fourthly, go through the list of approved banks and shop for the lowest interest rate leaving all your sentiments aside. If the project is preapproved, the bank will provide you a cheque within 1-2 weeks. I think SBI still provides the lowest floating rate and I would go with them. Check with your friend and contact the same executive if he was happy with the experience.

The only reason we were going with UCO was convenience. Sentiments are only stored for the property.
Now that you have said I will look at SBI.

Originally Posted by nowwhat?

Based on what you have said, take a longer tenure so you don't live hand to mouth. Your pay will rise and you can comfortably prepay the loan when possible. I once took a 20 year loan and prepaid it within 7 years, the first few years on EMIs were hard but I am glad I took the decision to keep a low EMI as we didn't have much earnings back then.

Exactly. Investing early has its downsides hence I was thinking of taking the loan for 25 years.

[nowwhat?]

Originally Posted by Pancham

Exactly. Investing early has its downsides hence I was thinking of taking the loan for 25 years.

Home loans do not have any prepayment penalty. A few may have conditions that you must prepay using your own funds, i.e., they do not want you moving the loan to some other bank. But so long as you pay from your funds, nothing to be bothered about.

Just go with whatever EMI you are most comfortable with, but make sure your interest rate is the lowest.

You seem to be quite young, otherwise you wouldn't be eligible for a 25 year loan. The years go by real fast when you are older, so don't worry too much about the tenure so long as you are sure the property is right for you.

[Pancham]

Originally Posted by nowwhat?

Home loans do not have any prepayment penalty. A few may have conditions that you must prepay using your own funds, i.e., they do not want you moving the loan to some other bank. But so long as you pay from your funds, nothing to be bothered about.



Just go with whatever EMI you are most comfortable with, but make sure your interest rate is the lowest.



You seem to be quite young, otherwise you wouldn't be eligible for a 25 year loan. The years go by real fast when you are older, so don't worry too much about the tenure so long as you are sure the property is right for you.

I turned 26 this month 😊.

One more query.

Is there a chance of a project getting into a dispute(like the ones you mentioned above) even if it has pre-approved financers (especially nationalized banks)?

[nowwhat?]

Originally Posted by Pancham

Is there a chance of a project getting into a dispute(like the ones you mentioned above) even if it has pre-approved financers (especially nationalized banks)?

I have mentioned this in stronger terms before. The bank is doing some basic checks on the property, but the bank will come after you like a ton of bricks in case you do not pay an EMI or two. They have you to pay them back, but you will have nothing in case your property is illegal.

Whoever said that if the project is preapproved by a bank that everything is fine is being foolish.

Here in Bangalore, Sobha, Mantri, K. Raheja have had walls/flats demolished as it was built on lake bed, culvert between two lakes and excessive floors in an airport zone respectively. These are all big time builders here. Spend a small amount on a lawyer and get peace of mind for the rest of your life.

[Pancham]

Originally Posted by nowwhat?

I have mentioned this in stronger terms before. The bank is doing some basic checks on the property, but the bank will come after you like a ton of bricks in case you do not pay an EMI or two. They have you to pay them back, but you will have nothing in case your property is illegal.

Whoever said that if the project is preapproved by a bank that everything is fine is being foolish.

Here in Bangalore, Sobha, Mantri, K. Raheja have had walls/flats demolished as it was built on lake bed, culvert between two lakes and excessive floors in an airport zone respectively. These are all big time builders here. Spend a small amount on a lawyer and get peace of mind for the rest of your life.

Thanks a lot Nowwhat.

An Update: My friend had a talk with SBI. They are offering 9.55% for 30 years. Moreover, if the first applicant is a woman it is 9.50%. So I think it is a good deal. Are there any disadvantages if I put my mother's name as the first applicant ? She is retired and earns pension.

With regard to the extension, the builder asked us to send them an official e-mail stating the reason for delay in payment.

[vinit.merchant]

Originally Posted by Pancham

Are there any disadvantages if I put my mother's name as the first applicant ? She is retired and earns pension.

There is only one disadvantage. You will not get a loan with your mother being the first applicant. As far as I know, it is the income of the first applicant which is the basis for the calculation of the eligible Loan amount. And they do not provide loans post retirement age.

Best bet would be to let go of that marginal 0.05% rebate and go ahead with 9.55.

A word of caution: SBI take a hell lot of time in processing the loan, so take that into account before a go ahead. If they say they will process and remit the loan in 15 days, take 30-40 days at least. Newer properties take marginally lesser time, but nothing less than 20-25 days.

[nowwhat?]

Originally Posted by vinit.merchant

There is only one disadvantage. You will not get a loan with your mother being the first applicant. As far as I know, it is the income of the first applicant which is the basis for the calculation of the eligible Loan amount.

+1. Mother is not eligible for home loan and neither will SBI give the rebate. Just let go of the 0.05%.

And as far as possible, don't complicate matters by registering property jointly or taking a joint loan as this may cause a lot of problems for you later.

What Vinit says about SBI's processing time may also be true. For our car loan, we went through the dealer and we got our vehicle in a week, but I have no idea how much time a home loan will take through them as I have not applied for one through SBI. It shouldn't take more than a month though.

[Pancham]

Originally Posted by vinit.merchant

There is only one disadvantage. You will not get a loan with your mother being the first applicant. As far as I know, it is the income of the first applicant which is the basis for the calculation of the eligible Loan amount. And they do not provide loans post retirement age.

Best bet would be to let go of that marginal 0.05% rebate and go ahead with 9.55.

A word of caution: SBI take a hell lot of time in processing the loan, so take that into account before a go ahead. If they say they will process and remit the loan in 15 days, take 30-40 days at least. Newer properties take marginally lesser time, but nothing less than 20-25 days.

My friend may have given me wrong information then. He claimed that the first applicant be my mother in this case.
Also, the project is pre-approved by SBI. Will that speed up the process??

[nowwhat?]

Originally Posted by Pancham

Also, the project is pre-approved by SBI. Will that speed up the process??

That will definitely make it faster.

[Pancham]

Update:

I talked to the builder after sending him an email asking for an extension. He said there are no issues and I can take my time.
Also, I had a talk with SBI and the manager was quite positive and asked me meet him after I return to India. He said it will take around 10-15 days max to disburse the amount after all the verification work is done.
I have a few questions relating to the property prices. Will take it to the Real estate thread. Thanks.