Sometimes people face lot of issues with their home finances for not having a proper clarity on the same. So, to have a hassle free home financing it is better to get the basic concepts clear… To be very candid, once my uncle was buying a property in Noida and somehow, he wasn’t aware of couple of facts related to home financing and he started interpreting that one of the real estate agents in Noida is not performing his responsibilities. But later on when things got clarified he apologized to him. So, to start off with:

Margin

While you are applying for a home loan, then the bank will be financing you with 80 – 85 % of the value of the property. The rest 15 – 20% would be your investment towards the property. The bank does that to ensure that you also have an interest in retaining your properties since this is your stake in it

EMI

EMI stands for Equated Monthly Instalments which is the summation of Interest and the Principal amount of the loan. If you have opted for under – construction property then it might attract Pre – EMI since in this case the disbursement of loan happens in installments, and Pre – EMIs are also tax benefitted.

Sanction and offer letter

Through the offer letter the bank confirms to you that you have been considered as one of the valuable loan customers for them but it never assures you that the amount you have applied for will be disbursed by them. The disbursement of the loan amount depends on the eligibility and your credit score. The financial institutes or the bank has the right to alter the home loan amount or even reject your application, wherein the sanction letter bears the amount of loan approved, tenure, EMI, terms and conditions of the loans and yes, the validity period too. If the loan is not availed within that time, then it gets lapsed. It is your responsibility to understand these documents and not the property dealers in Noida

PDC

PDC’s are the postdated cheques which are issued to the banks as a payment for EMI and these cheques cannot be processed before the mentioned date. This has no connection with the payment you make to your real estate dealers in Noida, since you pay him his fees for getting you a place to stay

Disbursement

When the bank decides to pay you the lump sum money against the house

Paying off the home loans and Mortgage rates

The bank charges certain rate of interest while you pay back. You have the option of either going for a fixed or floating rate

Pre-approved properties

Certain properties are already approved by financial institutes, hence applying for loans from those banks for the respective projects makes the process smooth

Resale

Resale properties are pre – owned properties. Buying those properties provides you with the edge of clean legal formalities

Processing fees or administrative fees

The bank charges you with a certain amount of fees for processing your loans

Home loans are also known as mortgage loans since, you keep the house mortgaged with the bank or any financial institutes against the money they pay to you. Once the loan gets cleared the ownership gets transferred to you.

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