[rkg]

Iam with ICICI( I cheat Indian Customer Indefinitely)
when i took home loan in March 2005 ROI was 7.25% it increased @ of 0.75% for every ) 0.5% bank rate increase by RBI.
But when RBI reduced the same bank rate by around 4% ICICI reduced ROI by 0.75%

i was paying 13.25% till Jan 2009 now it is 12.75%

Iam also palnning to shift to LIC.

In India floating rate means only increase. no decrease at all. All are parteners in this crime( both PSU, private and RBI for allowing such policy to continue)

Bank should be allowed to give loans only at PLR . No PLR minus rates. because banks are not reducing the PLR when RBi reduces the rate but increase when RBI increases.

As of Now PSU bank look better. But always opt for Fixed rate whatever it is.
But indian banks are used to blood sucking so they are not offering fixed rate loans for more than 3/5 years. It implies the best way is to avoid taking loan if one can do it

[major]

For Home loans please check with SBI, they are currently offering very competitive rates on Home loans.

[DCEite]

I have a query.
I heard that banks ask for previous 3 years ITR and Form 16 from an individual applying for a home loan.
What if someone has only past 2 year ITR and Form 16 because he has been working for 2 years only? Will banks oblige?

[NetfreakBombay]

Originally Posted by DCEite

What if someone has only past 2 year ITR and Form 16 because he has been working for 2 years only? Will banks oblige?

Usually not.

From Bank's point of view, someone who has just started the career has higher flight risk.

[DCEite]

Originally Posted by NetfreakBombay

Usually not.

From Bank's point of view, someone who has just started the career has higher flight risk.

Thanks for the answer , NetfreakBombay !

A follow up query: What if the person has been working for 3 years BUT hasn't got the Form 16 and ITR of the first year of working - because in the first year his total income was not taxable and he didn't file the return nor did he collect Form 16 from his employer.

[Eddy]

It might be a problem for the Nationalized banks, but ICICI and HDFC might consider your case.

[NetfreakBombay]

Originally Posted by DCEite

What if the person has been working for 3 years BUT hasn't got the Form 16 and ITR of the first year of working

That should usually be fine. But be prepared for loads of paperwork.

For nationalized banks, Loan officer needs to justify a loan through "continuity of income".

Thats the reason for last 3 year's ITR.

Loan eligibility is based on Average of Last 3 year's Gross salary.

Its usual for ITRs to be missing, continuity of income can be demonstrated by:

1. Salary slips
2. Bank statement that shows salary credits

E.g. If you are on H1B Visa for two years you might not have files ITR at all. But would have earned salary and paid tax in US.

In that case, Govt banks would ask for Income details in us and current balance in US bank account.

[kalpeshc]

Originally Posted by major

For Home loans please check with SBI, they are currently offering very competitive rates on Home loans.

For all who have floating interest rates and are stuck with ICICI/HDFC/private sector banks, it makes a lot of sense to switch over to someone like SBI - even with the prepayment penalty of 2% on your outstanding amount. The only caveat being that this 2% is charged on any pre-payments that you have already made in the past one year.

Also, with the Max Gain product of SBI - you can drastically reduce your interest paid in the long run and eventually close out your loan much earlier than planned. SBI does not charge anything extra for Maxgain.

[vasoo]

Originally Posted by kalpeshc

For all who have floating interest rates and are stuck with ICICI/HDFC/private sector banks, it makes a lot of sense to switch over to someone like SBI - even with the prepayment penalty of 2% on your outstanding amount. The only caveat being that this 2% is charged on any pre-payments that you have already made in the past one year.

Also, with the Max Gain product of SBI - you can drastically reduce your interest paid in the long run and eventually close out your loan much earlier than planned. SBI does not charge anything extra for Maxgain.

I am also a sufferer at the hands of ICICI. But I would not recommend SBI for its current offer. Its an eye wash with 8% only for the first year and 10.75% from 2nd year onwards. This simply does not make sense as the overall cost will be very high compared to competition. Canara Bank also launched a similar offer. Only if you read the fine prints you will realize the gimmick. They charge 8.5% for year one 9% for years 2 to 5 and then market rates from year 6 onwards. The only catch is that this can never be below 10%. That is, you are locked in for the rest of the term @10% even if the market rates goes down to 7% in another 5 years. I would prefer a pure floating rate with clear terms rather than these gimmicks.

As of now, I have short listed two banks, Bank of Baroda and LIC HFL to switch my loan. Both have very competitive rates and no tricks like fixed-floating rates etc.

[kalpeshc]

^^ The SBI site says that
[FONT=Verdana]Interest rate 8% p.a. (Frozen) for a period of one year. Interest rate will be reset after one year as per contracted rate at the time of sanction of loan[/FONT]

The current rates range from 9.75 to 10.25 depending on the tenure of the loan. I am not quite sure how you came up with a 10.75 figure. Also BOB mentions their rates as 10% for 10-15 yrs tenure for loans less than 30L. This is at monthly rest - SBI is at daily rest and SBI has Maxgain too!

[vasoo]

Originally Posted by kalpeshc

^^ The SBI site says that
[FONT=Verdana]Interest rate 8% p.a. (Frozen) for a period of one year. Interest rate will be reset after one year as per contracted rate at the time of sanction of loan[/FONT]

The current rates range from 9.75 to 10.25 depending on the tenure of the loan. I am not quite sure how you came up with a 10.75 figure. Also BOB mentions their rates as 10% for 10-15 yrs tenure for loans less than 30L. This is at monthly rest - SBI is at daily rest and SBI has Maxgain too!

I did not come up with any figures. My requirement is 50 lacs for 20 years. I am seriously looking for switch and I have a quotation in hand from all these banks. SBI has quoted 10.75% form year two. I have the soft copy and send you that if you want. BOB has a rate of 9.75% for upto 50 lacs loan 20 yrs term. LIC has 9.5%. All are at daily reducing balance. I have already applied for BOB and LIC HFL based on my analysis.

[kalpeshc]

I have just based my feedback based on their websites.

But please do check out Maxgain - somehow i feel that in the long run it would compensate for the extra rates that they may be charging compared to the other banks. If you have any surplus money (whatever amount), you can put it in a current account with SBI and the interest on the loan would then be charged only on the difference of your outstanding principal minus the surplus amount. Even though your EMI remains the same, the interest component is reduced for the time you have that surplus in that account and you end up paying for your loans faster. Also, it is an efficient way to save some money (assuming that you are not someone extremely knowledgeable with making your money work, like me)

[DCEite]

Suppose someone has paid booking amount for a home that is under construction. For some reason, he is not able to continue paying further payments (EMIs to bank or construction linked payments to the builder), due to job loss or any such eventuality. Will the booking amount be refunded? What about the down payment (supposing 20% downpayment has also been made to the bank for taking the loan). ?

[kalpeshc]

That's a scary thought and I am NOT basing my answer on any known hard facts.

I think that the builders and the bank would refuse to pay back the booking amount, but if it is otherwise, even I'd like to know whether there are any precedents for the same.

[myavu]

Good Evening my fellow BHPns,

I am planning to buy a 3 BHK flat in South Delhi area. But couple of flats (under construction) which I liked don't have an approved construction drawing and are constructed above the permitted height. The builder (not a reputed builder but a close associate) told me that he will provide me a Power of Attorney for the ownership of the said flats.

Will I face any problem in future after buying flats under PoA?

Is there any Banks/Financial Institutions who provide Home Loan against Flats/property bought on Power of Attorney?

Kindly help me out.

Thanks in advance.

Regards