Finance Loans

As per policy, banks can offer 75% to 90% of the COP (Agreement Value + GST + Other costs). List of papers/documents applicable to all applicants:

• Employer Identity Card.
• Loan Application: Completed loan application form duly filled in and affixed with 3 passport-size photographs.
• Proof of Identity (Anyone): PAN/Passport/Driver’s License/Voter ID Card.
• Proof of Residence/ Address (Anyone): Recent copy of Telephone Bill/ Electricity Bill/Water Bill/Piped Gas Bill or a copy of Passport/Driving License/Aadhar Card.
• Property Papers:
  • Permission for construction (where applicable).
  • Registered Agreement for Sale (only for Maharashtra)/Allotment Letter/Stamped Agreement for Sale.
  • Occupancy Certificate (in case of ready-to-move property).
  • Maintenance Bill, Electricity Bill, Property Tax Receipt.
  • Approved Plan copy (Xerox Blueprint) & sale deed, Registered Development Agreement of the builder, Conveyance Deed (For New Property).
  • Payment Receipts or bank account statements showing all the payments made to Builder/Seller.
• Account Statement:
  • Last 6 months' Bank Account Statements for all Bank Accounts held by the applicant/s
  • If any previous loan from other Banks/Lenders, then the Loan A/C statement for the last 1 year
• Income Proof for Salaried Applicant/ Co-applicant/ Guarantor:
  • Salary Slip or Salary Certificate for the last 3 months.
  • Copy of Form 16 for the last 2 years or a copy of IT Returns for the last 2 financial years, acknowledged by IT Department.
• Income Proof for Non-Salaried Applicant/ Co-applicant/ Guarantor:
  • Business address proof.
  • IT returns for the last 3 years.
  • Balance Sheet & Profit & Loss A/c for the last 3 years.
  • Business License Details (or equivalent).
  • TDS Certificate (Form 16A, if applicable).
  • Certificate of qualification (for C.A./ Doctor and other professionals).

Mostly all the top banks are associated with Auro Realty. At the time of launch, we approve the project with most top banking & financial institutions (HDFC, ICICI, Axis, SBI, Lic, canara bank, etc.).

EMI: When you make interest & Principal payments towards your outstanding Amount.

Pre-EMI: When you only make interest payments towards your outstanding Amount.

• Loan disbursal: The full EMI option is more apt for a one-time disbursal of the entire loan amount. The pre-EMI option is suitable when loan disbursal happens in parts.
• Interest rate calculation: The interest of pre-EMI is compounded based on the loan amount disbursed to the developer, unlike the interest of Full EMI which takes into account the entire loan amount.
• Loan repayment tenure: Since the monthly installments under full EMI contribute to the principal amount, the debt is repaid sooner by choosing this option compared to the pre-EMI option.
• EMI payments: The monthly payments begin from the start of the construction for the pre-EMI option. Whereas, the EMIs for the full EMI option start only after the completion and possession of the property.
• Impact on the components of the loan: With the payment of each monthly installment using the full EMI option, the principal amount and tenure get reduced. On the other hand, the EMIs paid using the pre-EMI option do not have any impact on the principal amount, loan repayment tenure, or rate of interest.
• Resale of property: With pre-EMI, the borrower will be able to sell the property right after or within a few years of its completion. On the other hand, individuals who have availed of the full EMI option may not be able to sell the concerned property for a certain period of time.
• Impact on finances: Paying pre-EMI can be easier on the pocket owing to the fact that the borrower has to only pay the interest during the pre-construction period while this might not be the case with the full EMI option.

• Pre-EMI is Ideal for:
• Those who wish to save money during the pre-EMI period and invest it in such a way that they get good returns on the amount.
• The pre-EMI option is also ideal for property investors who wish to sell the property once construction is completed
• Those who are waiting for a change in income capacity or cannot afford to pay full EMI at the moment will find the pre-EMI payment to be the best option
• Full EMI is Ideal for:
• Those who wish to pay the home loan by the time of possession of the property.
• This option is also ideal for those who face the risk of delay in construction. This would mean payment of pre-EMI for a longer period, which makes the total cost of availing the loan higher
• Tax Benefits:
• Both pre-EMI and full EMI repayment methods for home loans enjoy the same tax benefits. The tax deduction is not applicable during the under-construction phase. However, once the borrower obtains the possession certificate, the amount paid as interest (in pre-EMI or full EMI option) will be aggregated and is considered for a tax deduction in 5 equal installments.

   

  • Conditions for choosing the Full-EMI option.
  • The property has been purchased as a long-term investment.
  • You wish to repay the debt at the earliest.
  • You want to enjoy tax benefits as soon as the repayment tenure starts.
  • You foresee a delay in the construction of the project which means pre-EMI will have to be paid for a longer period, hence will increase the cost of the loan.
  • This is the best available option for the investment of funds.
  • Conditions for choosing the Pre-EMI option.
  • You do not want to pay the rent as well as the loan repayment EMI.
  • You plan to sell the property in the first few years after construction.
  • You wish to sell the property right after the construction is completed.
  • You have an urgent credit requirement.
  • You want to further invest the difference amount between pre-EMI and full EMI in order to gain higher returns.

A pre-approved loan is given based on your income and CIBIL score. A pre-approved loan can be availed by submitting your income documents to the bank. The bank will assess your income and provide you with a letter which will be known as a pre-approved sanction letter.The Main Advantages of a Pre-Approved Home Loan:

• Loan-effective property search: By having a clear picture of you, you can focus your search on affordable properties.
• Negotiations with the seller: With a pre-approved loan offer in hand, you have better bargaining power with the property seller.
• Quick processing: As lenders finish the credit appraisal in advance, the turnaround time on the entire loan process (from loan approval to disbursement) is reduced. You do not have to miss out on a good property deal or worry about an increase in prices.
• Interest rates: With pre-approved home loans, you do not have to worry about the interest rates going up by the time you choose a house and apply for a home loan.

• Interest rate: You should find out if the rates are fixed or floating. As opposed to Fixed Rates, Floating rates vary according to market conditions. For shorter loan tenure of 2-5 years, it is better to opt for fixed rates. But for a longer tenure, floating rates work best.
• Pre-Approved loans: Banks with your salary account might offer you a pre-approved loan. This has certain advantages like less documentation and faster processing.
• Processing charges and prepayment: The processing fee is the charge banks deduct for processing the loan. This can be anywhere between 0.25%-2% of the loan amount and varies from bank to bank.
• Documentation: Though most lenders seek the same documents, like proof of age, address, and income, actual requirements may vary.
• Turnaround time: The time taken to sanction and disburse home loans varies from bank to bank. There are several post-disbursement services involved. These include getting regular account statements and interest certificates on time every year. Choose a lender with strong systems and a good record of after-sales service.
• Pre-approval on Property/Developer: A lot of projects are pre-approved for availing home loans for buying a property in that project by a certain number of banks. This means that the bank has done due diligence on the legal aspects of the property and only then approved the property beforehand. So, whether or not you avail of a loan from that bank, you can conclude that the project is safer given that it has been pre-approved by some reputed banks.

Individuals can enjoy tax benefit which includes a maximum of Rs. 2 Lakhs on the interest paid and up to Rs. 1.5 Lakhs on the principal amount. (Tax Slab Changes every fiscal year).

You can apply for tax deduction under the following sections:

• Section 80C: This section provides a tax deduction for the amount paid by an individual towards repayment of the principal amount of a home loan. The maximum tax deduction allowed is 1.5 lacs under this section. Flat/House property should not be sold within 5 years of possession.
• Section 24B: This section entails tax benefits on interest paid on home loans. The maximum tax deduction is 2 lacs for a self-occupied property. The loan must be taken for the purchase/construction of a house, the construction must be completed within 5 years from the end of the financial year in which the loan was taken. 
  For let out property, there is no upper limit for claiming  tax exemption on interest, which means that you can claim deduction on the entire interest paid on your home loan. Incase the construction exceeds the stipulated time i.e 5 years, you can claim deductions on interest of home loan only up to Rs 30,000/- for the financial year.
• Section 80 EE: This section provides tax exemption on home loan interest for first-time home buyers. An additional deduction of Rs.50000 is provided which is over and above the tax deduction of Rs.2 Lacs provided under section 24B and Rs.1.5 lacs under section 80C. However, the deduction is applicable only if:

  Price of Property purchase < 50 lacs
  Home Loan amount < 35 lacs
  The benefit is available till repayment of the home loan.

  The home should be taken between 1st April 2016 to 31st march 2017 and on the date of loan sanction, the individual does not own any other house, i.e first time house owner.