At Landmark Nest, we believe in guiding you with expert advice on the types of home loans available, the necessary documentation and the eligibility criteria. Do reach out to us if you have further queries.
The common loan for purchasing a home.
A loan given for undertaking repairs, renovations and/or upgradation of your home.
A loan for the construction of a new home.
Home extension loans are given for expanding or extending an existing home. For example, addition of an extra room, etc.
A loan available for those who have financed the present home with a Home Loan and wish to purchase and move to another home for which some additional funds are required. Through a Home Conversion Loan, the existing loan is transferred to the new home, including the additional amount required, eliminating the need for pre-payment of the previous loan.
This type of loan is sanctioned for purchase of land for home construction.
The Bridge Loan is designed for people who wish to sell the existing home and purchase another. The bridge loan helps finance the new home, until a buyer is found for the old home.
Balance Transfer Loans help you pay off an existing home loan by availing a new loan from another willing lender institution.
This loan helps you pay off the debt you have incurred from private sources such as relatives and friends, for the purchase of your present home.
This loan is tailored for the requirements of Non Resident Indians (NRIs) wishing to build or buy a home in India. These loans are provided by eligible financial institutions in accordance with the guidelines issued by the Reserve Bank of India from time to time.
EMI (Equated Monthly Instalment) is the amount payable to the lending institution every month, till the loan is paid back in full. It consists of interest due, as well as a portion repayable towards the principal.
a) Some of the lending institutions sanction the loan in-principal in advance of your identifying the property
b) Free accident insurance
c) Waiving of pre-payment penalty
d) Waiving of processing fee
e) Free property insurance
To qualify for a home loan, most of the lending institutions in India require you to be:
a) An Indian resident or NRI
b) Above 21 years of age at the commencement of the loan
c) Below 65 when the loan matures
d) Either salaried or self employed and
e) Worthy of credit facility
For more details, refer module on "What are you getting into?"
Interest rates vary from institution to institution and presently range from 8.5% to 10% depending on the customer classifications. The interest on home loans in India is usually calculated on monthly reducing balance. In some cases, daily reducing basis is also adopted.
In this system, the principal, for which you pay interest, reduces at the end of the year. Thus you continue to pay interest on a certain portion of the principal which you have actually paid back to the lender through EMIs paid during the year. This means the EMI for the monthly reducing system is effectively less than the annual reducing system.
In this system, the principal, for which you pay interest, reduces every month as you pay your EMI.
In this system, the principal, for which you pay interest, reduces from the day you pay your EMI. EMI in the daily reducing system is less than the monthly reducing system.
Calculate the total amount payable under the different loan options available for a fixed loan period and amount. The loan under which minimum total amount is payable will be the cheapest source of funds.
Fixed rate of interest means that the rate of interest remains unchanged for the specified duration of the loan. This means you do not benefit if rates of interest drop in the market. Similarly you do not lose if rates of interest increase. Under fixed home loan rates, banks/HFCs retain the right to increase the rate of interest after the prescribed interval. This provision is mentioned in the loan agreement. This is known as reset clause in fine print.
This is the rate of interest that fluctuates according to the market lending rate. This means you stand the risk of paying more than you budgeted for, in case the lending rate goes up.
a) PROCESSING CHARGE: A fee payable to the lender on applying for a loan. It is either a fixed amount or may be a percentage of the loan amount applied.
b) PRE-PAYMENT PENALTIES: When a loan is paid back before the end of the agreed duration, a pre-payment charge is demanded by some banks/companies, which is usually between 1% and 2% of the amount being pre-paid.
c) COMMITMENT FEES: Some institutions levy a commitment fee in case the loan is not availed of within a stipulated period of time after it is processed and sanctioned.
d) MISCELLANEOUS COSTS: It is quite possible that some lenders may levy documentation, consultant charges and franking charges.
e) Registration of mortgage deed.
Repayment period options range between 5 to 20 years.
Get a step closer to your dream home by identifying the right banking partner and understanding your EMI.
Allow us to help you budget appropriately. Use our simple EMI calculator to know what your monthly financial commitment will be.
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Banking Partners
Everything an NRI needs to know about owning property back home.
We offer you a better understanding of documents, checklists and laws in India that will make your purchase an easier one.
For Indians abroad, owning property in India is a dream. One that comes with many questions. Our team understands the specific requirements and needs of NRIs, and are here to guide you to the perfect home. If, after reading this section, you have queries, please feel free to reach out to us.
Reserve Bank of India (RBI) Guidelines on NRI Investment in properties in India
