Sunday, January 20, 2008

You can transfer home loan to any other bank

Amitoj Sethi

I am an NRI working abroad and I would like to purchase residential plot in India. I wanted to know which banks provide loans for land/plots and what documents one needs to submit to avail the same.

Banks do not lend money for purchase of land. They do lend money for construction of a house if you already own the land.

Please advise if there is any rebate on home loan principle or on interest if it is a builders flat under construction and the owner is still waiting for the possession?

The rebates associated with a home loan from a tax saving perspective are on the interest paid as well as on the principal repaid. The deduction of interest payable on the loan taken to buy the house is up to a maximum of Rs 1.5 lakh every year under section 24(b) and the principal portion of the loan repaid to the bank will be eligible for deduction under section 80C (along with other contributions and investments) up to a maximum limit of Rs 1 lakh. This rebate can be claimed even if the flat is under construction and the owner is still awaiting possession, but the property should be registered in the name of the owner.

had brought a flat eight years ago by taking housing loan from my company (Insurance). Now, I want to know whether I can transfer that loan account to any bank that can takeover & provide me loan with current market value status.

You can transfer the home loan to any other bank. The bank will carry out a valuation of the property to estimate the current market value. Based on the current market value, they will offer you a home loan. Part of this amount will be paid directly to the company to take over the loan and the balance can be paid out to the applicant.

I am working in Ahmedabad and I want to buy a flat in Noida. Can I apply for a home loan? If yes, from where should I apply—Ahmedabad or Noida?

Ideally you should apply for a home loan from your current city of residence. The home loan can be for property in any other city. You should approach a bank which has branches in both cities as your residential and income status would need to be verified in one city and the property’s legal documentation and commercial