Blog #Home Loan Processing Fee

There are different kinds of loan repayment options available, making it more preferable by the customers as it will help reduce the burden of the daily monthly expenses.

Home purchase loans

The first and the foremost thing which comes is the home purchase loan. People purchase this type of loan because the availability of the loan to value ratio is too good in the market regarding this type of loan. These types of loans are generally avoided for flats in the complex, bungalows and row houses. One of the best things about this type of loan is that the financial institutions provide a loan of about 90% of the total value of the property at the house, and in some cases, it is also a hundred percent with low home loan processing fees.

To avail of this type of loan, there are some eligibility criteria for the people with an average range of age limit of 18 to 65 years, and the credit score should be above 750 or more. If the person is salaried, then the job experience needs to be a minimum of two years. On the other side of the person is self-employed, the minimum experience should be having for an average period of 5 years.

Home construction loans

This type of loan can be availed only by the owner of a plot of land on which a person wishes to build a new house or construct a new home. There is also an option available for taking a loan for or finishing an unfinished house.

According to this type of loan, the eligibility criteria among most financial institutions have been kept quite similar. The credit score requirement has been held at 700 or above, which means that a person having the trade scored more than 700 will have a favorable chance of getting the approval of a home loan.  For example, SBI Home Loans also offer good facilities for the customers as much as possible. As for the salaried people, there must be an experience of a minimum of one year while on the other side there is no such requirement in the case of a self-employed person.

Home improvement loans

This type of loan is generally availed for expansion or beautification or doing any sorts of changes. A considerable lump sum amount is required and can be funded through this type of loan only. There are specific criteria and this type of loan facility. The age criteria should be between an average limit of 18 to 65 years while on the other side it is thoroughly available for both the salaried all the self-employed people.

Some documents need to be submitted either in the attached form with the physical application form or uploaded online in JPG or PDF format. The documents required are the age proof, address proof, income proof, the property deeds, if there is any.

Land purchase loans

This type of loans mainly provides land or a plot to construct a house in that particular land. The eligibility criteria for this type of availing of the loan are very simple as most of the age group comes between the eligibility criteria limit from 18 years to 65 years.

Land purchase loan or NRI house loan

There must be a house construction or any structure for any business for any kind of commercial uses. While on the other side there is always also a requirement of an NRI housing loan, which includes the construction of a house on a particular land located within India and the tenure period for which can be extended to the limit of 30 years. To conclude, we can say that there is an ample number of opportunities and a variety of criteria range where somewhere or somehow one will automatically get fit in any of the requirements and the things have been made.

Also read this: Is it best choose for me when avail Home Loan  

Some information about Indian Overseas Bank

The Indian Overseas Bank (IOB) is a large government-owned bank in India. It is owned by the Ministry of Finance, Government of India, and is headquartered in Chennai, India. It has about 3,400 domestic branches, as well as six overseas branches and a representative office. It was founded in February 1937 by M. Ct. M.Chidambaram Chettiar with the twin goals of specialising in the foreign exchange market and overseas banking. It has since set several benchmarks in the Indian banking sector. By launching a personal loan programme, IOB became the first bank to foray into consumer lending. IOB was one of the 14 leading banks taken over by the Indian government after nationalisation.

Multiple factors are affecting the decisions of taking loans. Many banks are offering numerous loans at different rates. Nowadays the Home Loans are being offered at very low rates. It may lead to a debt trap sometimes. The best option is to be well versed and known to terms and conditions of the particular loans.

Indian Overseas Bank home loan is offer-able to various people in business and self-employed persons for the financial aid in home buying and renovating processes.

Features of Home Loan:

• Individuals and associations are eligible for this loan programme and groups of individuals and affiliates of cooperative societies. The age limit is set at 55 years old, but it can be raised to 60 years old if legitimate heirs are willing to apply as co-applicants.
• Loan purpose: The Indian Overseas Bank's Home Improvement loan scheme makes this loan available for various housing needs, including the purchase of a house/flat/plot and the restoration of existing houses/flats.
• A large loan amount is being offered: You may expect to receive funding for up to 90% of the expenses associated with purchasing a property, including identification and paperwork fees.
  
  

Eligibility Criteria for  Home Loans

• Individual borrowers must be under the age of 55 when payment is eligible for an Indian Overseas Bank home loan. If the claimant is a legitimate successor and joins as a co-applicant, this condition is extended to 60 years.
• Salaried employees should have at least 2-3 years of experience in a permanent position.
• Self-employed individuals should have worked in the industry for at least three years.
• The foremost vital things in Indian Overseas Bank Home loans are the home loan processing fee and the interest rates on Home Loans, which are thoroughly discussed here as following granting the home loan to its customers.
  
  

Home Loan processing fee: Indian Overseas Bank charges the processing fee while granting the loan. The processing fee may differ by the amount of the loan. Sometimes it could be 0.50% of the amount of the loan. Other times it could also rise upto 0.53%.

 Home Loan Rates: The interest offered by IOB is directly linked with the Repo rate in the country.And is actually at 7.25%. The overall interest rate on a home loan results from the RLLR and the spread multiplied by the loan  number.

Will the EMI on an IOB home loan stay the same or change in the future? 

Typically, the home loan EMI remains unchanged until the consumer demands a modification and Indian Overseas Bank approves it, according to the bank's eligibility requirements(be aware that nominal fees may also practice for effecting a customer-initiated extra in EMI). If the floating rate of interest on your home loan rises, your EMI will increase as well, according to the reset frequency of your loan. Your loan EMI will increase for each disbursement if you have a partially disbursed loan with a tranched EMI scheme. After thinking about your different commitments, the appraisal will assist you to estimate the quantity of EMI you'll quite simply spend. If you have decided the EMI you could afford, you could pick the right mortgage term.

Also  read this: How to apply for Home Loan in Pandemic?

How To Apply For A Home Loan?

The whole process of applying for a home loan is not so complex. Following are the steps which will tell you about the procedure of applying for a home loan:- 

1) Application:- The very first step for applying for a home loan is filling the application form. The form would contain a few details like your name, phone number, pin code, type of employment, etc. After filling the form, the representative will get in touch with you to move forward with the process of application. ICICI Home Loan offers attractive interest rates to its customers.

2) Collection of Documents:- Some of the documents that you need to apply for a home loan are:- 

a) Identity Proof- Aadhaar Card, PAN, Voter ID, Passport, Driving License, etc.

b) Residence Proof- Utility bills, ration card, PAN, Aadhar Card or renter’s agreement can be submitted. 

c) Bank account statements.

d) Latest salary slips.

3) Document Processing and Verification:- After taking your documents, the moneylender will process and authenticate all your documents carefully. They may even contact the relevant organisation or your office to confirm your occupation or employment. In this step of document processing and verification, they will also conduct a credit enquiry to check your credit report and your CIBIL score. Only if your credit report, documents and CIBIL score all are satisfactory, then the application for your loan will move further. You also need to fill the Home Loan Processing Fee.

4) Sanction Letter:- After the successful completion of all the steps mentioned above, the customer will receive a sanction letter. The following details are involved in the sanction letter:- 

a)  Amount of loan.

b) Rate of interest.

c) Type of interest rate, whether fixed or variable.

d) Tenure of repayment.

Apart from this, a sanction letter also contains other terms and conditions and policies of the home loan. The customer has to sign a copy of the sanction letter and revert to the lender. After all this, the offer of a loan will be accepted.

5) Secure fee payment:- This payment is a one-time secure fee, which you have to pay after you have signed the sanction letter. The moneylender can also ask you to pay this fee before signing the sanction letter.

6) The loan agreement and disbursal:- After the completion of all these steps, the final agreement of the loan will be given to you, after the checking and verification by the lender. Finally, the bank or the financial institution will disburse the amount of loan in your account, according to the terms and conditions.

Advantages Of A Home Loan

1) A home loan has a lower interest rate as compared to the other loans. 

2) A home loan is a really easy and simple way to get a large amount of money in a short period of time.

3) A home loan is a secured loan. It means that it is secured by your house value.

4) The home loan may be tax-deductible. It means that it is removed from the taxable income. It, therefore, lowers the expense liability of the tax.

5) The money is given to you in cash when you apply for a home loan.

6) A home loan is beneficial for the lenders too. This is because the lenders have a tangible asset that they can repossess. If the borrower who has borrowed the money for a home loan, fails to pay the debt, the moneylender can automatically take the whole possession of the house.

Disadvantages Of A Home Loan

1) You provide your home as collateral in a home loan. It is risky as you can lose your home to the lender, if you, unfortunately, fail to repay the debt.

2) In a home loan, there is a very high chance of facing bankruptcy. This is because the value of the home loan is worth more than the net worth of the house.

3) No doubt, a home loan is an easier way to get a large amount of money in a short span of time, but the borrower may sink deeper into debt if he takes up a second loan to pay the first one.

Also read this: How is a Land Loan different from a Home Loan?