1. First Time Buyer's Section:
The idea of living happily in the dream home in a posh locality is the ambition of every individual. But it also requires taking a huge risk in terms of monetary factors. Once in a lifetime investment requires loan to accomplish it, and that is how the home loans comes into the scheme of things.

With so many private sector banks, and private as well as public sector's housing financing companies lending their shoulders out, it's becoming gradually uneasy for the consumers to choose the best deal as well. We provide some basic home loan information.

2. Eligibility
The eligibility norms for availing of Home Loans are easy and simple to follow. There are different procedures for the different types of property loans available. These eligibility norms for home loans are applicable to all resident Indians

The basic housing loan eligibility is:

• The applicant must be 21 years or older when the loan is approved.
• The loan must terminate before or when the applicant turns 65 years of age or before retirement, or whichever is earlier.
• The applicant must have a regular source of income: employed or self-employed.

The loan amount for housing finance depends on factors like income, age, educational qualification, total number of dependants on the applicant, spouse's income, total assets, current liabilities, stability and continuity of occupation and credit and savings history.

3. The Process
Housing finance in India is easy. The moment someone decides to buy a house, s/he can apply for a home loan. Some banks allow applying for a home loan even before the property has been selected. The property can be in the same or different city of residence. Should there be a change in the financial status or plans, there are options to withdraw the sanction within 6 months of approval of the home loan.

4. Repayment Option
The best home loans are those in which the loan repayments are done via equated monthly installments (EMI). It is a fixed amount which is paid every month towards the loan comprising both the principal repayment and interest payment. EMI payments start from the month following the month in which the full disbursement has been made. The EMI is to be paid every month through post-dated cheques (PDCs) or Electronic Clearing System (ECS).

5. Types of interest rates for loans (Home Loan Rates in India)
There are usually two schemes available:

• Fixed Rate Loans
• Adjustable (Variable) Rate Loans.
  Under the Fixed Rate Home Loans the rate applicable on the date of disbursement remains fixed during the entire duration of the loan. In case of adjustable rates for Home/Land loans, the rate varies with the floating reference rate. The administration fee is a certain percentage (0.5%) of the total loan amount, plus the service tax. The interest is calculated on monthly remaining amount.

6. Security
The security for the loan is the property to be financed. Deposit of title deeds and/or other documents may be necessary. If the property is under construction some other securities like documents of life insurance policies, the surrender value of which is at least equal to the loan amount, guarantees from renowned guarantors, shares and such other investments may be needed. There should not be any existing mortgage, loan or litigation on the property.

7. Documents Required
The following are required original documents for Housing Loan in India:

• A passport size photograph
• PAN card
• Voters ID
• Passport or license for age-proof
• Last six months' bank statement
• Latest Form 16
• Certified IT returns for the past 3 years
• Administration fee cheque and loan enclosure letter are the required original documents.
• The bank may ask for further legal documents if required. The loan amount is disbursed after the required documents are submitted and after the selection of the home or property. A 230 A clearance of the seller or 371 clearance from IT authorities are also necessary. Sometimes Loan agreements, request for disbursement, post dated cheques and in some cases personal guarantors request are required documents for disbursal of the loan. Documents may vary from state to state.

8. Tenure
Home loan tenures fixed by RBI are available up to a term of 15 years. Some financial institutions have home loan tenures in the range extending up to 20, 25 and 30 years if the applicant fulfils certain criteria. However, it is not possible to opt for a term that extends beyond attaining retirement age or 60 years of age (whichever is earlier).

9. Tax benefits
Resident Indians are eligible for certain tax benefits on principal and interest components of a loan under the Income Tax Act, 1961. Interest repayment of Rs. 75,000 p.a. (for a loan on or after April 1, 1999) can get you a tax saving up to Rs. 25,000 p.a. Moreover, you can get added tax benefits under Sec 88 on repayment of principal amount up to Rs. 10,000 p.a. which can further reduce your tax liability by Rs. 2,000 p.a.