SANCH

LOAN AGAINST RESIDENTIAL PROPERTY

Loan can be availed against self owned residential property for varied purposes ranging from business related expenses to purchase of other properties. Financial institutions usually lend up to 70-75% against ready built properties & 50-60% against vacant plots (is available only from select financial institutions) of the market value as determined by empanelled technical evaluation firms. Loan eligibility is derived basis cash flows of the business. Important to note that end usage of funds is monitored and speculative use is not allowed.

LOAN AGAINST COMMERCIAL PROPERTY

Loan can be availed against self owned residential property for varied purposes ranging from business related expenses to purchase of other properties. Financial institutions usually lend upto 60-65% of the market value as determined by empanelled technical evaluation firms. Loan eligibility is derived basis cash flows of the business. Important to note that end usage of funds is monitored and speculative use is not allowed. Also the funding is extended against ready built properties only.

LOAN AGAINST INDUSTRIAL PROPERTY

This product is available only from select financial institutions. Loan can be extended upto 40-50% of the property value as determined by the empanelled technical evaluation agency. Loan eligibility is derived basis cash flows of the business. Important to note that end usage of funds is monitored and speculative use is not allowed.

LEASE RENTAL DISCOUNTING

This product is offered by financial institutions against residential /commercial/industrial properties. The loan eligibility is calculated basis a certain percentage of the rental income (net of applicable taxes) . In most financial institutions, it is mandatory to have the lessor/tenant rated by a leading rating agency. The period of loan is dependant on the tenor of the lease and extends to a maximum of 15 years. Repayment of loan is from an escrow account wherein the rentals are received.

Home Loans:

Loans are provided for purchase of plots, ready built houses and under construction residential properties. Generally, financial institutions extend loans maximum upto 80% of registered value of the property.

In case of purchasing a property in an under construction project, it is most important to check if the project has been approved by requisite civil/municipal authorities and by leading financial institutions.

In case of purchasing a ready built property vide a resale transaction, wherein the seller has already availed of a loan, it is important to obtain loan details and check with the proposed financial institution in advance regards their ability to transact a home loan with closure of seller’s loam through financed amount. Please note that not all financial institutions support such transactions.

In case of purchasing a plot, please do note that financial institutions normally fund composite loans only i.e. plot purchase plus construction. Depending upon their internal policies, they may extend the time of initiation of construction upto 2-3 years from the date of purchase of the plot.

SELF CONSTRUCTION:

Loans can be availed for construction of house (on plot of land) subject to availability of approved plans from requisite municipal authorities. Financial institutions extend up to 100% of the construction estimate value subject to overall loan not exceeding 80% of the property value as determined by empanelled technical evaluation firms.

RENOVATION OR HOME IMPROVEMENT LOANS:

Financial institutions extend, loans for renovation of your existing house. Immovable fittings, furniture and civil work can be included, however, any movables, including electronic equipment, etc. are excluded. Financial institutions extend up to 100% of renovation or improvement estimate subject to overall loan not exceeding 80% of market value of the property as determined by empanelled technical evaluation agencies. You can claim income tax benefits under Sec of the Income Tax Acts when availing of this loan type.

BALANCE TRANSFER AND TOP-UP LOANS

Financial institutions offer takeover of existing home loans at lower rate of interest from other institutions and can extend top up loan up to 80% of market value of the property as determined by empanelled technical evaluation agencies subject to the top up loan being restricted to a certain percentage of the main loan being taken over. Important to note that the end usage of funds of the top up loan should be for legitimate purposes only and not for speculation. The financial institution may require you to furnish details on the end usage of funds post-facto (post disbursement of loan).

COMMERCIAL PROPERTY PURCHASE

Majority of the financial institutions provide loan for purchase of commercial property. The nature of usage may be for office or shop/retail purpose. The loan may be extended up to 80% of the registered value of the property subject to market value being restricted at maximum of 80% as determined by empanelled technical evaluation firms. Most financial institutions do not fund under-construction commercial properties and therefore it is important to check before purchasing a unit in an under-construction project. Also imperative to check that the property is approved as a commercial unit by local municipal guidelines.