Questions to ask while going for a Home Loan

POSTED BY Raghavendra Nainala ON July 5, 2012 9:53 pm COMMENTS (12)

I am a prospective Home Loan Buyer(Flat Identified), I have been trying to get knowledge in this area. Wanted to see if I am missing anything in the list of Questions that I would need to ask the Bank Representative(ICICI Bank). The Problem I am facing is unless I ask them(Bank Representative) specific questions these are not being disclosed, so looking for help from people who can gone through this process before to see if I am missing out on any major questions that need to be asked.

List of Charges –

Processing Fee – the amount is very low(Rs.2809/-(preferred employer scheme)) when compared to HDFC and SBI who charge Rs.10000/-. this difference is making me feel uncomfortable.
LegalValuation Fee – as per representative – no charges
Loan Disbursement Fee – as per representative – no charges
Stamp Duty for Creation of Mortgage – 0.5 % of loan amount is being charged by HDFC and SBI, but with ICICI they said, they are not currently taking this one. If Government enforces then they will ask us to pay at that time.

EMI –
I wanted to Pay EMI even during the under Construction phase, which the bank associate had specified that I have to explicitly specify in the application as “EMI under Construction” as Loan type. (This was not disclosed until I asked the Representative specifically). Else I would have been stuck in a situation where I would have to pay Pre-EMI till construction was over.

Home Loan Insurance –
Was informed it is not Mandatory. But have to check with him, if we can explicitly say we dont want.
I am planning to Protect myself with a Term Plan which I can pay from my pocket.

Pre-Payment Pre Closure Charges –
Have been informed that there are no charges for Floating Rate Loans.
But still want to check on the following.
1. Maximum Amount that can be paid as Part Pre-Payment(earlier they allowed only 25% of Loan Principal Outstanding that can be paid in a single year) ?
2. Minimum Amount that can be paid as part Pre-Payment(looking at the comments section on some of the questions, that it needs to be atleast 2 times EMI amount) ?
3. No of times Part Prepayment can be made in a single monthyearduration of Loan ?
4. How soon can I make a part pre-payment as earlier there was a time limit of 180 days from loan disbursement wherein we cannot pay any part prepayment. Representative said this is no longer valid, and we can pay as soon as we make the first EMI Payment.
5. Mode of Part PrePayment ?? can we use Online Facilities like NEFT ?(I have Personally used NEFT for paying part prepayment and EMI for a loan back with Syndicate Bank)
6. What if the Loan is closed within x number of years of opening an account ? any limitations.

Daily Reducing Vs Monthly Reducing Balance ?

Regards
Raghavendra
Though I have read very good reviews about SBI Max Gain Home Loan, the documentation that they require, I may not be able to provide it, hence skipping that.

12 replies on this article “Questions to ask while going for a Home Loan”

  1. Ashraf Ahmed says:

    could you please let me know on the SBI MAX GAIN as im planning for a home loan

    1. Raghavendra Nainala says:

      Hi Ashraf,

      Please read the below thread to understand the SBI Max Gain Home Loan product

      http://localhost/jagoforum2/how-to-maximize-the-gains-in-sbi-maxgain-homeloan-account/2635/

    2. Dear Ashraf, Please check the link shared by dear Raghavendra regarding SBI Max Gain. If you are still in doubt, please post your Max Gain related query in that discussion itself.

      Thanks

      Ashal

  2. keyaas@gmail.com says:

    Raghevendra, Any luck with getting processed your loan request under Maxigain. I am applying for a home loan, but they needed a reference account number to process maxigain for NRIs. would be great help.

    1. Raghavendra Nainala says:

      Hi Keyaas,

      Sorry for the delayed response, but I was not able to get the Loan processed through SBI 🙁

      Regards
      Raghavendra

  3. Raghavendra Nainala says:

    Hi Ashal,

    I have been in the US for only 10 months, where as they are asking for 12 months bank statement and 2 years tax return. Though I have heard cases for few where the process has been expedited, I heard that they are taking long time to process before sanctioning of the loan.

    Regards
    Raghavendra

    1. Dear Raghevendra, I’m sharing you one of my friend’s experience for SBI’s Max Gain. He was out of india on an assignment for nearly 2Y. During that assignment, the salary was not drawn from Indian employer but from the foreign employer.

      After returning back to India, He applied for SBI’s Max Gain & the same was sanctioned. Regarding the ITR issue for you, Is it the case that You have not filed your ITR for this US period or all these 2-3 years? Please confirm.

      From your query it seems to me – you are interested in SBI’s Max Gain but are fearful of possible delays. I can assure you that please do not worry & go ahead with SBI’s Max Gain.

      I’ll wait for your reply to answer other queries.

      Thanks

      Ashal

      1. Raghavendra Nainala says:

        Dear Ashal,

        I came to US on 16th August 2011 and still continuing, and I have the W2 and filed tax in the US for the financial year 2011.

        But SBI’s requirement of 12 months foreign & local bank statement and 2 years foreign & india tax return is what I am worried about, because my period of stay is not that long in US to provide them that. I can provide them the Indian ones.

        I have filed my India Tax returns properly since 2005 when I started working.

        Since my current status is NRI, I need to have additional documentation on the POA to be provided to someone in India, which is applicable even for Private Banks.

        The real drawback I would face is, unlike private banks SBI doesnt provide service at the customers house.

        Regards
        Raghavendra

        1. Dear Raghevendra, Please check with the nearest SBI branch or with which you already have account. Now a days, SBI is also offering door step services. For this SBI has tie up with some pvt. agencies/people. Interestingly, you w’d not have to pay a single penny extra to these agencies for your loan work. SBI ‘ll pay them directly. Regarding the 10 months’ US data & before that Indian DATA, as the data is in continuation, SBI ‘ll accept the same.

          You may feel, I’m pushing you towards SBI Max Gain. The answer is yes. Why? The reason is simple – being in USA, you have the capacity to top up your loan be it from any bank. In case of SBI’s Max Gain, you can use this top up effectively for your benefit & at the same time, the liquidity of this top up ‘ll remain open for you which is not the case for any other bank’s normal home loan be it ICICI or any other.

          Thanks

          Ashal

          1. Raghavendra Nainala says:

            Thanks Ashal for your reply!

            Will definitely check with the SBI branch nearest to my place, if they provide any door step service like private banks, which will help me a lot and also give me the flexibility of the top-up being liquid to be used as I need.

            But do you think, should I as a Home Loan buyer be worried about something other than the ones I listed in my original post when going in for a home loan ?

            Regards
            Raghavendra

          2. Dear Raghvendra, the points raised by you are good ones. Please do not worry. Regarding this SBI agency thing, a few days back there was a query on the forum itself & one person has utilized the services of such an agency. Please look for that query within past 10 days.

            Thanks

            Ashal

  4. Dear Raghevendra, May I know the details of those docs, which you can not provide for SBI’s Max Gain?

    Thanks

    Ashal

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