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'The loan tenure affects your EMI and eligibility'

DNMUM375149 | 10/8/2016 | Author : Satyam Kumar | WC :552 | Business & Economy

Expert Speak: Guidelines regarding home loans and tips to verify if a property is already mortgaged or not
dna of property Dusshera Special

How are different types of home loan co-applicants considered by lending institutions? Would a husband-wife get the same eligibility level than a father-son or two brothers? How does the lender evaluate this?
All financial institutions are offering plain vanilla home loans, which has the reducing balance methodology for EMI/ interest calculations. Many of them have two-year fixed, flexi loans or even home loan overdraft.
A husband-wife will always get higher eligibility than a father-son combination because of two reasons:
a Almost all institutions are offering 15-25 bps discount if the first borrower is female. Lower ROI means lower EMI per lakh of loan, i e., higher loan amount.
b Loan tenure is also a function of your age, since your fathers age will invariably put restrictions in loan tenure, which may lead to less than 20 years home loan product. Again, lower the tenure, higher the EMI per lakh per month and hence reduced eligibility.
 
While buying a resale flat, how can one be sure whether there is an existing pending mortgage on it or not? In case the seller says the original share certificate and agreement have been lost, how can one verify the mortgage status?
A title search report reveals mortgage status on a property, to be doubly sure (if your seller agrees, you can seek his credit report, this will reveal property loans and you can ask corresponding collateral. Also, if you ask for original sighting of all chain documents and seller is able to produce it, then it invariably means he is not running a loan (because none of the banks/ NBFCs will extend loans without having at least part of the original docs in their custody).
Either of the above three methods can be used for ensuring the mortgage status of property being bought. More appropriate of the three can be identified based on the state you are buying.
A share certificate is not a title document so original being lost has no impact, as long as you are able to verify it from society office and also take a letter from society that no NOC for bank loan or otherwise has been issued against the property being discussed.
Loss of an agreement is a serious matter and the same has to be mitigated through proper public notice, FIR, etc. You must consult a good lawyer in such cases.

We have read about instances where the same flat has been mortgaged to 2-3 lenders. How does this happen? In such a case, what would happen to someone who has bought such a house in resale?
This happens mostly in the case of C and D class developers. They create same document in name of multiple party to avail bank loans. This can be avoided by doing title search report and also checking if there is construction finance on the property and taking NOC of the bank/ NBFC for flat under consideration.
Some resale transactions with multiple funding has also been sighted. By insisting on the title search report, society NOC and sighting of all previous agreements for the flat you can minimize the chances of fraud.
Share your queries on home décor, legal matters, housing loans, society issues, property insurance and vaastu to get them answered by our experts. Email them to dnaofproperty@gmail.com
The author is a Co-founder, Loantap



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