Home Loans Related Frequently Asked Questions
What are the types of housing loans available?
Various housing loans are offered by financial institutions.
Prominent among these are:
This is the basic housing loan for the purchase of a new
home which covers cost of the flat, deposits and charges,
stamp duty and registration charges
Home Improvement / Extension Loans
For implementing repair works and renovations in a home
that has already been purchased by you.
Home Construction Loans
For the construction of a new house.
For people who wish to sell the existing house and
purchase another and need finance for the new house, until
a buyer is found for the old house.
To pay off an existing housing loan and avail of the
option of a loan with a lower rate of interest.
To pay off the debt you have incurred from private sources
such as relatives and friends, for the purchase of your
Who can apply for a housing loan?
Any Indian citizen, including Non Resident Indians, with a
steady source of income can borrow funds for financing the
cost of a flat from housing finance companies and banks
Can a Non Resident Indian avail of housing loans
Yes, depending upon the eligibility criteria and policy of
How much can a person borrow?
Loans are generally disbursed between 70%-80% of the cost of
the flat. The balance money is to be funded by the flat
purchaser from his own contribution. The percentage of loan
would vary from bank to bank.
How does OSSK Corp assist a flat purchaser for procuring
All projects at OSSK Corp are pre-approved for grant of home
loans by leading housing finance companies and banks. The
sales team liaises with the all leading Housing Finance
Institutions for project approvals, processing the loan,
documentation and disbursement of loans.
What is an EMI?
Equated Monthly Installment ("EMI") is the amount comprising
a portion of the interest and the principal loan amount
which is payable by a borrower to the lender every month.
How is the rate of interest calculated in India?
Interest rates vary from time to time and from institution
to institution. The interest calculated either on a daily or
monthly reducing or yearly reducing balances.
What is a fixed-rate housing loan?
A fixed-rate housing loan is a loan where the rate of
interest is constant through the entire term of the loan
What is a floating interest rate housing loan?
A floating interest rate loan is a loan where the interest
rate payable is linked to the market conditions such as the
base rate and rises and falls with the bank rate varies.
Hence a borrower bears the risk of interest rate
What are the repayment period options?
Repayment period options range generally from 5 to 20 years.
Some of the banks may give loans up to 25 years also.
What are the charges for availing a housing loan?
Processing Fees payable to the lender on applying for a
loan and is either a fixed amount not linked to the loan
or may also be a percentage of the loan amount.
Prepayment Penalty between 1% and 2% of the amount being
pre paid is charged by some institutions when a loan is
paid back before the end of the agreed duration. Many
banks now don't levy penalty on partial Prepayment
Stamp duty and registration fee as per prevailing rate of
Miscellaneous costs: such as administrative costs, legal
documentation charges, technical consultant charges.
What security is required for a housing loan?
The flat purchased is the primary security and is mortgaged
to the lending institution till the entire loan is repaid.
Additional security such as life insurance policies, shares,
bonds, fixed deposit receipts, national savings certificates
can also be offered, as per the requirements of the
Do lending companies require guarantors?
Yes. Many lending companies require 1 guarantor or a
What is the time required for approval of a loan
Varies from Bank to Bank but usually it is 15 – 20 days for
a salaried person and 20 – 30 days for a self employed
person depending on the applicant's documents.
What is the time required for disbursement of loans?
Usually loans are disbursed within 10 – 15 days after
completion of verification by the institution, documentation
(such as handing over of the original agreement for sale /
lodging receipt to the lender) and completion of all
relevant procedures and only after proof that the borrower's
own contribution has been paid by him to the Vendor /
Builder / Developer.
Do institutions accept joint loan applications?
Yes but it varies from Bank to Bank.
What are the documents required at the time of making an
Application for a housing loan?
- Proof of age
- Identity papers
- Proof of residence
- For salaried individuals: Latest salary slip
Bank statements reflecting salary credits for the previous
For self employed individuals: certified copies of balance
sheet, profit and loss statement and tax challans / tax
returns for the previous 3 years
For partnership/private limited companies: the Articles of
Association, partnership deed and details about the firm
For NRIs Latest salary certificate specifying, Name (as it
appears in the passport), Date of joining, Passport
Number, Designation, Perquisites and salary, Photocopy of
labour card/identity card, Photocopy of valid resident
visa stamped on the passport, Photocopy of monthly
statement of local bank account, Property related
Do lending institutions offer incentives for housing
Sometimes lending institutions offer incentives for a
specified period or under a special scheme. Incentives could
be any of the following:
- Free accident insurance
- Waiving of pre payment penalty
- Waiving of processing fee
- Property insurance
* Loans are at the sole discretion of the bank