Frequently Asked Questions
What are the purposes for which I can avail a loan?
You can avail a loan for constructing, purchase of ready-built house/flat, take over of existing home loan from other Banks, purchase of a site, renovation, repairs & improvement and extension of the existing house.
What are the repayment period options available in case I avail a housing loan?
The period of a loan may be 1 to 20 years or up to the age of retirement whichever is earlier.
How much amount of loan I am eligible for?
The amount of loan for which you will be eligible, will be determined by MHFSL on the basis of your income, age, number of dependants at home, income of spouse, other liabilities, continuity of employment, savings habit, etc. In addition, the loan eligibility will also be depending on the value of property offered as security.
When can I apply for a loan?
You can apply for a loan even before you have selected your property. The loan amount will be determined and sanctioned to you, based on your repayment capacity.
What are the stages involved in taking a housing loan from MHFSL?
The two main stages in the process of taking loan are: a) Sanction of the loan whereby you get a loan offer letter from MHFSL, indicating the loan amount sanctioned and the terms and conditions of sanction b) Disbursement of the loan amount.
Who can be a co-applicant?
Co-owners of the property should join as co-applicants. Co-applicants should usually be blood relations of the loan applicant.
What are documents do I need to submit to avail the loan?
Following are the documents which you need to submit while applying for a loan:
- Application form duly filled-up with photograph affixed on the space provided for the purpose
- Identity Proof (Aadhaar Card, PAN Card or Election Identity Card), age proof, residence proof
- Copies of the Bank Account Statements for the last six months of all the Bank Accounts including loan accounts/OD Accounts, if any.
- Salary Slips for the latest three months in case of a salaried individual
- Copies of the Income-tax Returns for the last 3 years duly certified by the Chartered Accountants along with financial statements, such as P&L Account and the Balance Sheet for the last three years in case of a self-employed
- Form No.16 in case of a salaried individual
- Business Profile in case of a self-employed
How I can enhance my loan eligibility ?
You can increase your loan eligibility by any one of the following ways:
- you can include a co-applicant to the loan transaction whose income can be reckoned.
- you can include your other income such as rental income, agricultural income, pension from previous service, etc subject to proof.
- giving other liquid investments as additional security viz deposits, insurance policy.
What are the securities/collaterals that I will have to provide for availing the loan?
The security for the loan is basically the first mortgage of the property against which loan is granted by way of deposit of title deeds. However, depending upon the requirement, MHFSL may also take additional collaterals.
What is an EMI ?
Once you avail the loan, you have to make repayment of the same in Equated Monthly Instalment (EMI) which covers principal and interest components. Repayment by way of EMI commences from the month that succeeds the month in which, you avail full disbursement of the loan.
What is Pre-EMI?
Pending final disbursement of the loan, you have to pay interest on that portion of the loan which has been disbursed to you. This interest is called `Pre-EMI Interest’. Pre-EMI interest is payable every month from the date of each disbursement, up to the commencement of EMI after availing the full loan.
I am an NRI. Can I avail a housing loan to buy a residential property in India ?
Yes, NRIs can avail housing loan from MHFSL for the purpose of purchasing residential property in India. As per current guidelines of RBI, persons of Indian origin, holding foreign passports are eligible.
I have only few years of service left. Am I eligible for a loan?
You can get a loan even if you have only few years of service left. If you have a son who is in service or if your wife is employed and has more years of service left, then, any of them can join the loan transaction as co-applicant. Also, you have the option of closing the loan in full at the time of retirement from out of terminal benefits. However, till retirement, you will have to keep on paying EMIs as stipulated in the terms of sanction.
Does the property require to be insured?
The Borrower shall ensure that the property is, during the pendency of the loan, always duly and properly insured against all risks such as earthquake, fire, flood, explosion, storm, tempest, cyclone, civil commotion, etc. MHFSL be made the sole beneficiary under the policy / policies.
What will be the mode of repayment once I avail the loan in full ?
Following are the modes of repayment available to a borrower:
- ECS (Electronic Clearing System)
- Post Dated Cheques (PDCs)
- Deduction from salary at source
- Direct remittance to the account of MHFSL on the basis of standing instruction
Can I pre-close the loan or make lumpsum payments as and when I get excess money?
You can pre-close the loan at any point of time. Also, you can make lumpsum payments any time during the currency of the loan. There will be no pre-closure charges in respect of housing loans sanctioned to individual customers. However, other housing loan to non individual may attract prepayment charges.
Do I get tax benefit on the Loan ?
Yes, Resident Indians are eligible for certain tax benefit on principal amount of repayment and interest component of a loan under the Income Tax Act, 1961. Interest repayment of Rs.2,00,000/- per annum can get you tax saving up to about Rs.66,000/-. In addition, you can also get tax benefit under Section 80C on repayment of principal portion of the loan up to Rs.1,50,000/- per annum which can help further reduce your tax liability by about Rs.50,000/-.