HouseInKerala.org: Everything about Kerala Home Loans

There are various reasons why you would like to avail a housing loan when you build or purchase a residential property. It could be to ease the up front payment or to manage your tax payments. In this article we describe the various aspects of Kerala Housing Loans- normal industry standards and the contact details of various Home Loan Providers in the Kerala Housing Sector.

The details given below are average industry standards that can be taken as a base-line. However, there could be variations with different Financial Institutions based on individual Project details and other factors.

You will need to state the purpose for availing the loan; whether the home loan is for- construction/ purchase/ repair/ renovation/ alteration of a house or if it is for the purchase of a plot for the construction of a house.

Persons eligible for a Kerala Home Loan are the following-

All Resident / Non-Resident Indians with a regular monthly income

Spouses of Non-Residents, who are residents and receiving regular monthly income.

Salaried persons, self employed businessmen, professionals and agriculturists, who have regular monthly income and who have a minimum of three years of standing / experience in their line of activity.

The age should be such that the borrower is able to close the account before he attains the age of 65.

The Maximum Loan amount that can be availed is usually-

60 times of Net monthly income (NMI)/ Average monthly income (AMI) for individuals upto 45 years of age.

48 times of Net monthly income (NMI)/ Average monthly income (AMI) for individuals over 45 years of age

However the repayment obligation is restricted to Maximum 60% of the NMI/AMI.

20% of project cost will be considered as margin; and 80% will be disbursed as the loan amount.

The disbursement of the loan amount is usually performed as following-

For the construction of a new building: In three stage, 30%, 40% and 30% of the loan amount. The last installment is usually disbursed three or four weeks prior of the completion of the building

For outright purchase 100% to the seller, after payment of the margin of 20% by the applicant.

For purchase of plot and construction of the building, the loan component for purchase of the plot will be only 30% of the total project cost or 80% of the land value which ever is lower.

Mode of Repayment is usually as follows-

For applicants upto 45 years of age – Maximum 20 years.

For applicants above 45 years of age – Maximum 15 years.

It includes the repayment holiday of a maximum of 18 months. Repayment usually begins on completion of the house or 18 months from the disbursement of the first installment of the loan, whichever is earlier.

Mortgage of property by deposit of title deeds is retained by the Financial Institution as Security.

Usual Processing Charges:

Limit upto Rs.25,000 - Nil

Limit above Rs.25,000 to Rs.2 lakhs - 0.5% of the loan amount (Max.Rs.500/-)

Limit above Rs.2 lacs - 0.5% of the loan amount

Insurance is to be arranged for the total cost of building.

Papers to be submitted to the bank are as follows-

In addition to the application form(in duplicate) and two passport size photographs, the following papers are to be submitted to the respective Bank.

1. PROOF OF INCOME

In case of salaried persons:

Salary certificate showing deductions.

Authorisation to deduct monthly installments from the salary of employee for credit of the loan account wherever available.

In the case of self employed / professional / business men.

Audited accounts and Balance Sheets/income tax assessment orders/Returns/Memo/Statements of computation of taxable income filed for the last 3 years.

2. DOCUMENTS TO BE SUBMITTED FOR CONSTRUCTION / IMPROVEMENT OF HOUSES

A copy of the plan inclusive of site plan approved by the Corporation/ Municipality/Development Authority/Panchayat as required.

A copy of the building permit issued by the Corporation/ Municipality / Panchayat as required. In areas where building permit is not required a No Objection Certificate from the authority concerned.

Estimate approved by licenced Egineers/Architects approved by local bodies.

Original and prior title deeds.

Latest tax receipts.

Possession Certificate

Encumbrance certificate from the Sub Registrar for the last 15 years.

Title clear certificate from the banks approved advocate.

Valuation report from the banks approved valuator.

3. DOCUMENTS TO BE SUBMITTED FOR PURCHASE OF HOUSES/FLATS

A copy of the agreement for sale.

A copy of the Title deeds of the present owner.

A copy of the land tax receipt.

A copy of the building tax receipt.

Encumbrance certificate from the Sub Registrar for the last 15 years.

Title clear certificate from the banks approved advocate.

Valuation report of the property and building from the banks approved valuator.

After the sale deed is executed, the original deed along with fresh encumbrance certificate and possession certificate should be submitted. For purchase of plot alone all the documents as above except the no. iv are to be submitted. After availment of the loan, encumbrance certificate for four months after the date of mortgage is to be produced.

Home Loan Providers in Kerala